Founder to increase stake as Redrow plans to raise £80m through placing

HOUSEBUILDER Redrow has unveiled plans to raise almost £80m of funding through a placing and open offer, in a move which will lift its founder’s stake.

The builder said it will use the funds to buy land, including plots in London and across England.

Chairman Steve Morgan, who founded the builder almost 40 years ago, could see his stake rise from 29.9 per cent to between 32.8 per cent and 41.6 per cent once the new shares are issued.

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“There are an increasing number of land opportunities both in London and in the regions and as such we are looking to raise further capital to enable us to take advantage of these opportunities as they arise,” said Mr Morgan.

Funds have been earmarked for schemes such as 500 optioned plots in Leeds, said Redrow, as well as growing its London division. Seven of its 76 sites are in Yorkshire and as of December, Redrow had 39 per cent of its land in the North, some 13,713 plots.

But analysts questioned the motives behind the placing.

“Raising money at a premium on the back of a strong sector run and into visibly tougher markets is a bold move and could have ulterior motives,” said Peel Hunt analyst Robin Hardy. “Steve Morgan could end up with 42 per cent and with a waiver in hand, could he be looking to take full control?”

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