Gleeson suitor to appeal to investors

Christopher Mills, the activist investor, said yesterday he would put a takeover offer direct to shareholders in MJ Gleeson, after a near £200m bid from his Castle Acquisitions vehicle was rebuffed by the builder.

Analysts said Gleeson was not an obvious target for a hostile takeover, as the Gleeson family is believed to own about 30 per cent of the company and the staff to hold 9 per cent.

Mr Mills, who has overseen a restructuring at Lonhro Africa, hit out at the track record of Gleeson, describing it as "not exactly the most wondrous", and the manner in which Castle Acquisitions' reverse takeover offer was rejected in a statement on Monday.

Castle Acquisitions said: "This rejection was made without further enquiry or negotiations.... [Castle] regrets that Gleeson did not feel prepared to take discussions forward in a constructive manner."

Mr Mills, a former acolyte of Lord Stevens, said the bid price was "misrepresented" in a statement from Gleeson on Monday, which described it as worth 345p a share. According to Mr Mills, the deal is worth 383p a share to Gleeson or £197m, if taken entirely in Castle shares.

Castle is a shell company listed on AIM and boasts a pension fund surplus of £27.5m and £1.5m in cash. Mr Mills said that because of this surplus, a takeover by Castle Acquisitions would hand £12m, after tax, to Gleeson shareholders "for nothing". Under the proposal, Gleeson's existing investors would still own 97 per cent of the enlarged group.

Some analysts suggested that Gleeson may be talking to another bidder. The company, which declined to comment yesterday, is due to hold its annual meeting today.