Redrow founder plots takeover move
Filed under: News
Steve Morgan, who is owner of Wolverhampton Wanderers Football Club, returned to Redrow as executive chairman in a boardroom coup in 2009 and has been successful in reviving its fortunes since then.
Redrow has formed an independent committee of directors to consider the proposal, which is backed by another major shareholder in hedge fund Tosca.
While the offer is only slightly higher than Redrow's closing price on Thursday night, Bridgemere said it represented a premium of 24% on the average price seen over the last three months.
Bridgemere recently increased its shareholding in the housebuilder from 29% as part of an £80 million fundraising by Redrow to bolster its London division.
Mr Morgan set up Redrow as a small civil engineering business in 1974 with the help of a £5,000 loan from his father. The business floated on the stock market in 1994 before Mr Morgan stepped down as chairman in 2000.
He returned to the company three years ago after it posted its worst ever results and has boosted its performance by placing traditional family housing at the forefront of its offer.
Redrow shares were trading 3p above the proposed offer price on Friday, although Panmure Gordon analyst Mark Hughes said a bidding war looked unlikely. He added: "We believe it unlikely that a rival bid at a larger premium than this will materialise and with the potential concert party owning over 54% of the share capital, it is likely that this bid will go through."
Mr Hughes said Mr Morgan's historic involvement in Redrow meant it was unlikely the takeover would act as a catalyst for further bids in the sector.