Redrow chief makes £560-mn bid to win back control

The chief of the UK's biggest housebuilders is involved in a £560 million move to win back control of the company he founded in 1974.

Steve Morgan, who is owner of Wolverhampton Wanderers Football Club, returned to Redrow as executive chairman after a boardroom coup in 2009 and has successfully revived its fortunes since then.

His Bridgemere group, with a 40-per cent stake in Redrow, had tabled a preliminary takeover approach valuing the Flintshire-based housebuilder at 152p a share, equivalent to around £562 million.

Redrow has formed an independent committee of directors to consider the proposal, backed by another major shareholder in hedge fund Tosca and while the offer was 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 seen over the last three months.

Bridgemere recently upped its shareholding in the housebuilder from 29 per cent as part of an £80 million fundraising by Redrow to strengthen its London division. Redrow was set up by Morgan as a small civil engineering business in 1974 for which he had taken a £5,000 loan from his father.

The business floated on the stock market in 1994 before Morgan stepped down as chairman in 2000, returning to the company three years ago after it posted its worst ever results and had boosted its performance by placing traditional family housing at the forefront of its offer.

Redrow posted an 80 per cent jump in first-half profit  as its focused on higher-priced family houses.

In June, the government said it hoped to set off a 1930s-style house building boom with the use of its low borrowing costs to make finance cheaper, in an effort to drag the economy out of a second recession in four years without abandoning austerity plans.