Wednesday, March 4, 2009

Steve Morgan rattles Redrow's cage by upping his stake to 29.9%

Steve Morgan, the founder of house builder Redrow who announced back in 2000 that he was quitting the group, has bumped up his direct holding in the business from 17% to 23%.

Two of his investment vehicles - Bridgemere Securities and Durcan Investments – have bought a swath of shares from Toscafund Asset Management.

On top of that, Bridgemere holds contracts for difference over an additional 6% the Redrow statement on the Stock Exchange this morning reports that “Bridgemere would have an interest in approximately 29.9% of the issued share capital of Redrow if these contracts were closed out through physical settlement.”

That puts Morgan within a whisker of 30% - the figure at which he would have to launch an all-out take-over bid should he still have an appetite for more.


Steve Morgan rattles Redrows cage by upping his stake to 29.9%


Morgan wants to return in a hands-on capacity and “has proposed that he should join the board of Redrow in an executive role”

That would trigger a shake-up of the board.

The board says that it is “seeking clarity on these board changes”

By way of justifying their recent actions, the existing board states: “Redrow continues to be mildly encouraged by the improvement in sales reservation rates in the first weeks of 2009 against an unprecedented downturn in its markets over the last 18 months.”

Born in Liverpool, Morgan borrowed ВЈ5,000 from his father to start a drainage systems company in 1974. Redrow grew and moved into housing contracting and in 1983 switched to an upmarket development strategy.

Redrow’s policy was never to build a house it hadn’t got a customer for. All properties were pre-sold.

Morgan sold off 30% of Redrow in 1994 when the company first floated on the Stock Exchange. That move made him nearly ВЈ100m.

Then in March 1997 he sold a similar tranche, netting a further ВЈ93m.

With a 5% stake in Liverpool Football Club, there was immediately speculation that with too much idle time on his hands he might splash out as a soccer benefactor.

His third big sell of Redrow shares in 2000 cut his shareholding from 35% to 5% and brought in another ВЈ115m.

Morgan's football mania has indeed broken out - but not at Liverpool.

The life-long Liverpool supporter made two attempts to buy the club, both of which fell through. He then bought Wolverhampton Wanderers in 2007 instead for just ВЈ10. The deal was that he would then splash out another ВЈ30m beefing up the club's flagging fotunes.

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