Founding chairman Alan Cherry aims to buy £111m share from HBOS over next five years
The Cherry family intends to buy back the 50% stake in Countryside acquired by HBOS two years ago in an £111m deal.
Alan Cherry, founding chairman, said it was the family’s intention to make the purchase over the next five years, but he refused to rule out making a bid in the next 12 months. Countryside is half-owned by Cherry, a former member of the government’s urban taskforce, and his two sons, Graham and Richard.
Alan Cherry said that the 2005 deal with HBOS included clauses obliging the bank to sell to the Cherry family if it were offered a reasonable price. A spokesman for HBOS said the company would treat an approach from the Cherry family on its merits. He said: “We would have an open mind to having these conversations.”
Cherry said: “Our intention is to gradually buy out the bank. When the time comes, we would expect to treat the bank absolutely fairly.” Control of the business is vested in a board weighted four to three in favour of Cherry’s Countryside appointees.
HBOS gained its 50% stake by financing the Cherrys’ decision to delist the company from the stock exchange in February 2005. The deal valued HBOS’ stake at £111m.
Cherry said the move was motivated by a desire to own the business he founded in 1958. “Wouldn’t you like to own your own house? It’s just an ambition of mine.” He said there was no immediate plan to buy back the stake and denied there had been any dispute with HBOS.
The comments come as the stock market valuation of housebuilders hit a two-year low because of concerns about the residential market. While the HBOS share was worth £111m in 2005, stock market valuations are now approximately a fifth lower. Analysts said Cherry might be able to buy the stake for less, but questioned how a deal would be financed.
For more on the Cherry/Countryside story go to www.building.co.uk/archive