Countryside up for sale

Following pressure from shareholders, Countryside has begun the process of putting itself up for sale.

The partnerships-focused housebuilder reported on the 13th June, that it had decided to “conduct an orderly process” of finding a bidder willing to offer a value for the company “that the board considers compelling relative to the long-term standalone prospects of Countryside as a listed company.”

It added that if it failed to find such an offer, “given the board’s view of the significant potential for the business as a standalone entity,” it would remain an independent listed company.

Countryside stated that any discussions with third parties regarding an offer would be undertaken “within the context of a formal sales process”, so that these conversations could take place confidentially.

It has recognised Inclusive Capital, which holds a 9.2% stake in the business, as a potential bidder, with the US-based investment management firm wishing to participate in the formal sales process. Countryside said that it was currently not in discussions with any other companies on potential offers.

Rothschild & Co, the housebuilder’s lead financial adviser, will support the process. The preparatory work for the formal sale process is expected to take “a number of months” to complete.

Countryside’s announcement follows its rejection of two offers from Inclusive Capital on a potential takeover to turn the company into a private business. On May 30, Countryside stated that after “carefully evaluating” each of the proposals with Rothschild & Co, it had concluded that they “materially undervalued the company and its prospects.”

Since then, Countryside said that a “meaningful number of shareholders” had expressed their belief that the firm would be better served as a privately-owned business in order to capitalise on the opportunities ahead, “or as part of a larger business”. These shareholders have approached the board “to actively seek offers for the company”.

Countryside said that “in light of this feedback”, it would begin the process of potentially finding a buyer. It also said that given the changed circumstances, it would suspend its previously announced share buyback programme, “until the formal sale process is completed or terminated”.

The move also follows the business posting a half-year pre-tax loss and announcing the outcome of a review of its site operationsThis found it needed to “raise its game” in certain areas of its business.

Countryside said today: “The board believes that, given Countryside’s differentiated market position and attractive business model, it is well positioned to create significant shareholder value over time.

“The board is confident that, with the clear strategy it has in place and with the ongoing execution of the operational improvement plan announced on 7 April 2022, Countryside has a strong platform to deliver value in excess of the proposals received.”