Phillips & Drew reduces holding in contractor and housebuilder after failed takeover.
Speculation is growing that fund manager Phillips & Drew may pull out of Alfred McAlpine completely after it reduced its stake in the company from 23% to about 21.5%.

The move comes in the midst of increasingly strained relations between the two since Phillips & Drew backed an unsolicited approach for the group this month.

Alfred McAlpine chief executive Oliver Whitehead said: “We met with Phillips & Drew before we put our statement out rejecting the mystery bidder’s offer.

“Because of some selling and some buying by several of their pension funds they now have a 21.5% stake. It is clear that they have a different agenda to us now, and of course they have their own pressures to perform as well.” McAlpine’s group finance director Jeffrey Hume would not reveal the name of the mystery bidder, although he did confirm that it was not someone already in the construction industry.

“To be honest, when I heard the name it meant nothing to me,” said Hume, adding that he had not seen the individual’s name mentioned in any reports on the matter so far.

“When Phillips & Drew backed the approach we went to see them to ask why, and they flatly said: ‘No comment.’ So now, if somebody else comes in with a higher offer, we can presume that Phillips & Drew will back them as well.” At the group’s annual general meeting last week a number of shareholders voiced concerns over the approach and McAlpine sought to reassure them that the company was providing shareholders with good value.

Chairman Sir Terence Harrison said: “The position is that if we receive an offer which is considerably more than 215p [the original offer] a share, the board will give it serious consideration. But McAlpine is certainly worth more than 215p. Our message is ‘stick with us and you’ll get the value instead of someone else’.” First quarter profit for 1999 is ahead of last year in all parts of the group’s business. Reservations in the homes division are up, as is average selling price – from £93 000 to £113 000. Orders for the construction services arm have picked up as well, with £400m of “good quality” work secured in the first quarter.

The group said it is reviewing its non-core assets and promised more disposals, if appropriate, following the sale of its US operations.