'Done deal' – founder close to retaking control of Redrow

Steve Morgan said to have enough shareholder support to lead struggling housebuilder again
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The Independent Online

Sources close to Steve Morgan, the former Redrow chairman, are claiming he has secured more than 50 per cent shareholder support in his battle to take over the housebuilder, saying: "It's a done deal."

Mr Morgan, who is the chairman of Wolverhampton Wanderers Football Club, last week launched an audacious bid to regain control of the company he founded in 1974. He took his shareholding to 29.9 per cent, lining up a raft of new directors to manage the company following a desperate share price dive during the credit crunch.

Redrow admitted on Monday that "Mr Morgan has proposed that he should join the board of Redrow in an executive role, which, together with other proposals, would result in a fundamental change in the composition of the board".

A source close to Mr Morgan said: "Steve has got essentially 30 per cent of the company, and he has the support of several of the major shareholders. In total, he easily has in excess of 50 per cent of voting power at the company – it's a done deal."

A second source added that Mr Morgan hoped to take control "within weeks", possibly by the end of the month. But the sources conceded that his turnaround plans for the group would not become clear until he was able to conduct a thorough examination of Redrow's books. "He won't know for sure what to do until he gets in there and has a good look around," said one of the sources. "It's clearly a troublesome market at the moment."

The sources declined to confirm reports that Greg Locke, chief executive at Mr Morgan's private property group, Bridgemere, was working in tandem on the coup.

Like most of its peers, Redrow has performed poorly during the downturn. The share price is currently hovering around 150p, down from nearly 350p last April.

Mr Morgan made around £300m from Redrow, which he left in 2000. A lifelong Liverpool fan, he came close to buying his hometown club before turning his attention to Wolves, which now sit top of the Championship.

There seems to be little animosity between present and past Redrow managements. It was reported on Friday that current Redrow chairman Alan Bowkett had told Mr Morgan that his own club, Norwich City, had put eight goals past Wolves this season.

A friend of Mr Morgan said: "Steve is fine with that. He is a good friend of Delia Smith".

Ms Smith, the television presenter and celebrity cook, is the major shareholder of Norwich.

Should Mr Morgan succeed in his bid, it seems certain that chief executive Neil Fitzsimmons will be ousted. In its interim results last month, Redrow announced a pre-tax loss of £46.2m for the six months to 31 December. Pre-tax profit was £35.8m in the second half of 2007.