Founder Steve Morgan begins action to retake control of Redrow

REDROW chairman Steve Morgan yesterday moved to regain full control of the company he founded in 1974, teaming up with two investment firms to make a tentative offer of £562 million for the housebuilder.

Morgan, who also owns Wolverhampton Wanderers, tabled a preliminary takeover approach through his Bridgemere Securities investment group, which already owns 40 per cent of Redrow after buying into a rights issue earlier this year.

The group said it was “considering the possibility” of making a 152p-a-share all-cash offer in conjunction with Penta Capital and Toscafund, an asset manager that owns nearly 14 per cent of Redrow.

While the offer is only slightly higher than Redrow’s closing price on Thursday night, Bridgemere said it represented a premium of 24 per cent on the average price over the past three months. It said the price was “a strong value proposition” considering Redrow’s share price performance in recent years, but warned that there is no certainty that an offer will be made.

Redrow said it had noted the approach and the board would consider it, but asked shareholders to take no action yet.

Morgan set up 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 and Morgan stepped down as chairman in 2000.

He returned to the company three years ago after it posted its worst ever results and has turned around its fortunes with an emphasis on building family homes.

Earlier this year the firm raised £80m from the market to fund expansion plans in the London area, where the housing market is currently resilient. It sold its Scottish business last year.

Peel Hunt analyst Robin Hunt said that since Morgan added to his stake during the placing, it was “always possible he was going to push for the whole thing”.