US investor eyes third bid for housebuilder Countryside

AN ETHICAL investor has launched a £1.5bn takeover bid for the housebuilder Countryside Properties after it failed to capitalise on the pandemic housing boom.

Shares in the FTSE 250 company soared by as much as 30pc to 311p after Inclusive Capital said it was seeking to engage with Countryside over a 295p-per-share offer, after its two previous offers were rejected. Inclusive is one of the housebuilder’s biggest shareholders with a 9.2pc stake.

Countryside’s shares have tumbled by more than half over the past year after its profits were hit by a failure to meet completion targets, leading to the departure of its chief executive.

Last week, the housebuilder swung to a £181.5m pre-tax loss for the halfyear to March, from a £85.4m profit a year earlier following a dip in completions. The offer follows a government announcement of affordable housing reforms in the Queen’s Speech.

The reforms, first reported in The Daily Telegraph, will see a local infrastructure tax levied on firms to set aside money for local services including new affordable housing. Countryside’s partnership model, which strikes agreements with local authorities to build on land rather than buying up land banks, could be a beneficiary of the reforms.

Jeffrey Ubben, managing director of Inclusive Capital, said: “For 30 years [Countryside] prospered by having a stakeholder model at its cause, via the partnerships scheme.

“However, as a public company it has struggled, and has come up short on completing new homes. We think that Countryside is better served by going private with an owner operator board.”

John Martin, Countryside’s chairman, stepped in as interim chief executive in January following boss Iain Mcpherson’s abrupt departure.

Mr Martin pledged to tour Countryside’s UK sites to see why completion targets have been missed, as labour shortages slowed build rates. Inclusive Capital said its possible offer represents a 31.4pc premium on Countryside’s shares at the end of trading on Friday.

Sam Cullen, an analyst at Peel Hunt, said: “We would be surprised to see the offer accepted at the current level.”