US hedge fund sees £1.5bn Countryside takeover bid rejected

Countryside has rebuffed a £1.5bn takeover bid from San Francisco-based investment fund Inclusive Capital Partners (In-Cap).

According to the Financial Times, the US hedge fund went public with a £1.47bn offer for the property developer on Monday (30 May 2022).

It offered to pay 295 pence per share – a premium of about 25 per cent to Friday’s (27 May) closing price – and followed two earlier bids that had been made in private.

In-Cap said: “On 26 May 2022, In-Cap was notified by Countryside that the company would not engage with In-Cap or provide access to due diligence materials.

“This represents the second attempt made by In-Cap to engage with the board of Countryside over the last two months.

“Countryside shareholders deserve the opportunity to decide on the merits of any offer, and that if an approach is made in good faith, the board should act in the interests of its shareholders by engaging with the potential offeror and not deny its shareholders this opportunity.”

In-Cap currently owns 45.8 million shares in Countryside, reflecting a 9.2 per cent interest in the group. Shares in Countryside increased significantly after the takeover bid, rising 20 per cent to 278p in today’s midday trade.

Countryside has “strongly advised” its shareholders to take no action in relation to the approach.

Founder and managing partner of In-Cap Jeffrey Ubben said: “In-Cap was founded to support businesses which generate positive impact on the environment and society.

“We believe Countryside is meeting a critical societal need and as a holder of approximately 9 per cent of the issued share capital of Countryside, In-Cap believes Countryside is best positioned to serve this role and to succeed as a private company under ownership of investors with a long-term investment approach.”

Countryside said in a statement: “Countryside confirms that it has received two unsolicited, non-binding, conditional proposals from Inclusive Capital in relation to a possible offer for the entire issued, and to be issued, share capital of the company.

“The first proposal was received on 14 April 2022 in relation to a possible offer of 225 pence per Countryside share in cash and a contingent entitlement of up to a maximum of 59 pence, structured as a contingent value right and the second proposal was received on 17 May 2022 in relation to a possible cash offer of 295 pence per Countryside share.

“The board of Countryside carefully evaluated each of the proposals together with its financial adviser Rothschild & Co, and concluded that the proposals materially undervalued the company and its prospects. Accordingly, the board rejected the first proposal on 22 April 2022 and rejected the second proposal on 26 May 2022.”

In January, then Countryside chief executive Iain McPherson stepped down from his role after the company revealed its profits had dropped “below board expectations”. He had led the group for two years.

Countryside, which works on several regeneration projects, was named the preferred partner and contractor for a 2,500-unit London housing estate scheme in October 2021.

The firm decided last year that it would shut down its private-sale housebuilding to focus on its partnerships business with public sector clients, housing associations and others.

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