Founder plans to keep all but one of housebuilder’s directors in place if he seizes power
Redrow founder Steve Morgan, who launched a boardroom coup at the housebuilder last week, is not seeking to clear out its board.
According to sources close to the process, Morgan wants to install himself as executive chairman. The only other major change on the cards is the ousting of Neil Fitzsimmons, Redrow’s chief executive.
It is understood that his place would be taken by Greg Locke, the chief executive of Bridgemere, Morgan’s private property group. Locke worked alongside Morgan at Redrow for 12 years as regional chairman and main board director.
A source said: “Steve is keen to keep the non-execs and people like finance director David Arnold, who is highly rated. There is a lot that is still operationally very good at the company, so there will be no mass clearout.”
It is understood that Morgan, who has amassed an effective stake of 29.9% in the company he founded in 1974, has the backing of Toscafund, the second-largest shareholder, which holds 20%.
This means that Morgan may control almost 50% of Redrow’s shares, although the source added that the timing of any boardroom changes depended on whether he was forced to convene the nomination committee to rubber-stamp appointments.
The source said: “If it is the formal route, it could be weeks. If it is the informal route, it could be days. It’s fairly academic, because Steve’s calling the shots.”
It is understood that Merrill Lynch, Redrow’s financial adviser, has informally explored the possibility of a sale of the company as an alternative to Morgan’s plan. However, that is described by people close to the situation as a procedural obligation rather than a serious attempt to sell the business.
Kevin Cammack, an analyst at Cenkos Securities, said: “Who on Earth would have the cash or appetite for a housebuilder at the moment? Everything points towards Morgan getting his way.”
Steve Morgan in numbers
21 Age he started Redrow in 1974
£5,000 The loan from his father that provided the start-up capital
2000 The year he stepped down as Redrow chairman
£10 The amount paid to buy Wolves football club in 2007 (after he agreed to invest £30m)
199th Position on 2008 Sunday Times Rich List (£430m fortune)
More on Morgan and Redrow at www.building.co.uk/archive