Countryside submits to activist pressure and starts sale process

COUNTRYSIDE has bowed to pressure from activist investors and put itself up for sale.

The house builder said it will invite potential buyers to make bids following preparatory work that is expected to take “a number of months”.

It has appointed advisers at Rothschild & Co to run the bidding process.

The move comes just a fortnight after Countryside revealed that it had received two takeover proposals from Inclusive Capital, a US hedge fund, and rejected both of them.

Inclusive offered 295p a share for the company, valuing it at about £1.5bn.

But Countryside said this “materially undervalued the company and the board’s view of its prospects” as an independent business.

However, the builder said that in the days following the disclosure, board members received “feedback from a number of significant shareholders” who argued the company “would be in a better position to capitalise on opportunities as a privately-owned company or as part of a larger business”.

“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,” a statement to the London Stock Exchange added. “If no such compelling proposal is forthcoming, then the board is committed to Countryside remaining as an independent listed company.”

The launch of a sale process comes after Browning West – an activist investor and Countryside’s largest shareholder – pressed for a break-up of the business that would see the private house building unit sold, leaving the remaining company clear to focus on partnerships with affordable housing developers.

The investor publicly called on Countryside to sell itself earlier this month.

Sam Cullen, an analyst at Peel Hunt, said the group was also likely to attract interest from private equity suitors.

Shares in Countryside remained almost flat at 284p following the announcement yesterday.