British housebuilder Redrow Plc (LON:RDW) said its suitors Bridgemere Securities Limited in concert with funds Toscafund Asset Management LLP and Penta Capital LLP had decided to end negotiations over a takeover offer for the company.
Bridgemere, a company owned by Redrow’s chairman Steve Morgan, together with Tosca and Penta proposed on 31 August to take over Redrow at GBP1.52 (USD2.44/EUR1.90). Under the UK’s takeover rules, the companies had been initially given until 4 October to come up with a firm offer for the housebuilder. That deadline was then extended to 18 October, Redrow has said.
The target firm gave no reasons for the termination of the talks, but said that each Bridgemere, Toscafund and Penta had reserved the right to make, or take part in an offer for Redrow within the next six months under certain conditions. These conditions include agreement and recommendation from the Redrow board, a third party announcing an offer for Redrow, or material change of circumstances being determined by the UK’ Takeover Panel. The former suitors also informed Redrow they reserve the right to buy Redrow shares.
Already owner of some 40% in Redrow, Bridgemere said in August that the buyout proposal represented a strong value considering the performance of Redrow’s share in recent years when they traded at a substantial discount to the reported net asset value over extended periods of time.
Toscafund is also a Redrow shareholder with a stake of about 13.8%.
According to Reuters calculations, the buyout proposal valued the target firm at GBP562m.