Countryside will launch a formal sales process after bowing to pressure from its investors.
The housing developer said: “A meaningful number of shareholders believe that the company would be in a better position to capitalise on the opportunities ahead as a privately-owned company or as part of a larger business and have asked the board to actively seek offers for the company.”
Last week Browning West, a Los Angeles-based hedge fund with a 15.3% stake in Countryside, called for the board to conduct a review of the group, which the investor said would perform better if it was privately owned or part of a larger business. It claimed actions by the board had led to a “significant destruction of shareholder value”.
The instruction came after the housebuilder rebuffed a £1.5bn approach last month from Inclusive Capital Partners, which has built up a 9.2% stake. While the offer price of 272p per share was significantly above the developer’s share price, Countryside said the offer “materially undervalued” the business. Countryside was valued at 568p per share last August, but had fallen to around 232p when In-Cap made its approach.
The company said: “In light of this feedback, the board has decided to conduct an orderly process to establish whether there is a bidder prepared to offer a value that the board considers compelling relative to the long-term standalone prospects of Countryside as a listed company.”
However, it insisted it was “well positioned to create significant shareholder value over time” as a listed company. “In the event no such compelling proposal is forthcoming, given the board’s view of the significant potential for the business as a standalone entity, then the board is committed to Countryside remaining as an independent listed company.”
Rothschild will be handling the sales process.
Inclusive Capital has told Countryside’s board that it wishes to participate in the formal sale process. As such it will no longer be subject to a put up or shut up deadline of 5pm on 27 June 2022. Countryside said that it had not yet received any other approaches.
It added that “it would be inappropriate” to continue its share buy-back programme until the formal sale process is completed or terminated.
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