Morgan ditches Redrow takeover bid

Aaron Morby 12 years ago
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Redrow boss Steve Morgan has scrapped plans to buy back the house builder he founded in 1974 after ending takeover talks with the firm.

Morgan, who owns a 40% stake in Redrow, had tabled a 152p-a-share proposed bid at the end of August valuing Redrow at around £560m.

But yesterday just minutes before the 5pm deadline to make an offer, his Bridgemere investment group withdrew the bid.

It is reported some Redrow investors were looking for a significantly higher offer of around 220p per share.

It is also reported that shareholder Fidelity, which owns 10.5% of Redrow, complained to the Takeover Panel about Morgan’s decision to get pre-backing from second biggest shareholders Toscafund, which holds a 17% stake.

Fidelity raised concerns that with more than 57% of the company, any rival bid offer would be unlikely and smaller shareholders had little power to vote the deal down, which requires 75% backing.

Under Takeover Panel rules, Morgan would need to wait six months before making another offer for the company.

Morgan returned to Redrow as executive chairman in a boardroom coup in 2009 and has been successful in reviving its fortunes since then.

He first formed Redrow as a small civil engineering business with the help of a £5,000 loan from his father. The business floated on the stock market in 1994 before Morgan stepped down as chairman in 2000.

He returned three years ago to overseen a turnaround in its fortunes by returning the house builders focus to family homes. It recently reported full-year results showing a 70% jump in profits to £43 million for the year to June 30.

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