Is Britain’s most brazen housing boss set for an astonishing comeback?
After THAT controversial £75million bonus bonanza... Now shamed Persimmon chief grabs £21m MORE Now US raider builds Taylor Wimpey stake
CONTROVERSIAL housebuilding millionaire Jeff Fairburn has been thrust back into the limelight after his powerful business partners triggered a campaign to overhaul one of the sector’s most famous names.
Activist investor Elliott confirmed a Mail on Sunday report from last weekend that it wanted strategic change at Taylor Wimpey – publishing a letter on Friday with a list of demands.
The open letter to the Taylor Wimpey board informed them it had secretly built a major stake in the firm, and was now a top five shareholder. It called for an external chief executive to be appointed ‘to remedy its long-term underperformance and regain credibility with investors’. Elliott said an ‘experienced operator’ was now required to lead the company.
Sources said Elliott’s interest in Taylor Wimpey has sparked a wave of speculation at senior levels in the housebuilding sector that Fairburn – who famously accepted a £75million bonus in 2018 and was later ousted over the fiasco – could be parachuted in to run the firm or take another board role. Such a move by Fairburn – dubbed ‘Moneybags’ and condemned by shareholders – would, without doubt, be highly controversial.
Sources familiar with Elliott’s thinking dismissed the idea of Fairburn taking charge.
But Elliott has already lent Fairburn significant financial support, assisting his return towards the centre-ground of the housebuilding sector.
In January last year, he was appointed chief executive of Berkeley DeVeer after buying a 50 per cent stake in the firm. Just a year later, Fairburn struck a deal with Elliott to acquire northern builder Avant Homes, where he has become chairman.
The Mail on Sunday last Sunday broke the news that Elliott had taken a stake in £6billion housebuilder Taylor Wimpey. It is understood Elliott then asked to meet the company.
But on Wednesday, Taylor Wimpey chief Pete Redfern announced the shock news that he was stepping down after 14 years in charge. The company insisted his exit was not linked to the activist’s arrival.
Avant’s relatively modest size in an industry led by three big players – Barratt, Persimmon and Taylor Wimpey – has fuelled speculation that the role is merely a stepping stone for Fairburn. He is said to be keen to heal his reputation after becoming an emblem of corporate greed. The nadir of the pay scandal saw him walk out of a BBC interview after being asked about his bonus, which was aided by the boom that followed the taxpayerbacked Help to Buy Scheme.
One senior industry source, who knows Fairburn personally, said: ‘There’s no way Jeff just wants to be concentrated on little old Avant.
It only builds about 2,000 homes a year. He is keen to rehabilitate his reputation and get back to running a big entity.’
An Avant Homes spokesman said Fairburn remained ‘wholly committed’ to the firm, adding: ‘He is not involved with nor considering any involvement in any other business.’
City sources said Fairburn last year approached private equity firms about backing a separate housing deal, and had even looked at a possible acquisition of £900 million housebuilder Crest Nicholson.
The Mail on Sunday also revealed last month that Elliott was betting against housebuilders, taking short positions in Bellway and Barratt. A shortlist of executives to run Taylor Wimpey has already been drawn up, with individuals approached, it is understood. Taylor Wimpey’s group operations director Jennie Daly is seen as the frontrunner.
Investor sources said executives with appropriate experience could include Barratt deputy chief Steven Boyes, former Persimmon boss Dave Jenkinson – who succeeded Fairburn – and Crest Nicholson chief Peter Truscott. Elliott also called for two new independent directors with industry experience to be appointed. City sources speculated that Elliott’s ultimate goal could be to force Taylor Wimpey’s board to sell off parts of its lucrative land bank.
Last year, the builder completed a £500million equity raise to pursue a land-buying offensive – a move which Elliott claimed had stoked ‘concerns about delays in the return of capital to shareholders’.