UK housebuilder Countryside rejects $1.9 bln offer from shareholder
- Countryside says offer 'undervalues' company
- Possible takeover offer for 295p per share
- Latest offer represents premium of about 23%
May 30 (Reuters) - Countryside Partnerships (CSPC.L) on Monday said it rejected an "undervalued" potential takeover offer from San Francisco-based investor Inclusive Capital (In-Cap) valuing the British housebuilder at about 1.47 billion pounds ($1.86 billion).
Earlier on Monday, In-Cap, the third-largest shareholder in Countryside with a 9.2% stake, said it had made two approaches to the company's board, who refused to engage with the investment firm and give it access for due diligence.
London-listed Countryside said it had rejected both offers as it believed the proposals undervalued the company and its prospects.
In-Cap's latest offer was to buy the rest of Countryside's shares it does not already own, for 295 pence each - a premium of about 23% to the stock's last close. Countryside rejected this offer on May 26.
UK housebuilders, which enjoyed robust work-from-home related demand during the pandemic, are now battling concerns over a slowdown in the housebuilding market amid escalating inflation and a growing cost-of-living squeeze.
Last month, Countryside warned of lower annual profit following a review of its business.
"The board is confident that, with a clear strategy in place following the operational review announced on 7 April 2022, Countryside has a strong platform to deliver value in excess of the proposals," Countryside said, referring to In-Cap's potential offer.
In-Cap said Countryside would be in a better position to turnaround its business as a private company rather than as a public entity as it continues to recover from manufacturing losses and costly expansions which hit half-year profit.
Brokerage Peel Hunt said: "On balance we would be surprised to see the offer accepted at the current level, with many of the company’s top shareholders supportive of management's turnaround strategy."
Shares in the FTSE-250 listed (.FTMC) company, which have fallen about 47% this year as of Friday's close, rose as much as 30% after In-Cap's possible offer.
($1 = 0.7911 pounds)
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