Ex-chief Morgan fights to head Redrow again

By KARL WEST
Updated: 19:09 EST, 3 March 2009

Redrow chief Neil Fitzsimmons looks set to be ousted from the struggling housebuilder after founder and former chairman Steve Morgan told the board he wants to head the group again.

Morgan is seeking an executive role after increasing his stake in the North Wales-based builder to 23.5 per cent from 17 per cent.

The lifelong Liverpool football fan, who owns Midlands club Wolverhampton Wanderers, yesterday outlined his demands in a face-to-face meeting with Redrow chairman Alan Bowkett.

Second coming: Wolverhampton Wanderers owner Steve Morgan is coming home to Redrow

A source said: 'He (Morgan) wants to be the boss, and there is no point in having two bosses, there is just no room. So that would change.

'Neil Fitzsimmons is a grownup, he recognises that what shareholders want, shareholders must get.'

The source said investors were rallying behind Morgan's second coming. Shares in Redrow closed up 15p, or over 11 per cent, at 150p.

His proposal evokes memories of the return to front-line action of Sir Lawrie Barratt during the last major property downturn in 1991. He came out of retirement to guide Barratt - the builder he founded - through the turmoil.

Redrow last week crashed to a first-half loss of £46.2million after being hammered by the housing market slowdown.

Morgan has waited patiently for the best moment to strike. Last October, he snapped up 14.4million shares in Redrow from Toscafund Asset Management, taking his stake up to 16.24 per cent. It is thought this cost him around £24million.

He topped up his stake this week to 23.5 per cent with another purchase from Tosca, run by former financial analyst Martin Hughes, known affectionately as the rottweiler.

This is believed to have set Morgan back just short of £15million. Tosca now owns 20.5 per cent of Redrow. The founder also controls stock that would potentially increase his holding to 29.9 per cent.

Morgan founded Redrow in 1974, floating it in 1994. He sold off 30 per cent of his holding in the float, making him nearly £100million. He sold a similar tranche in March 1997, netting another £93million.

His third big share sale was in 2000 when he banked £115million after cutting his stake from 35 per cent to just 5 per cent after leaving the group. The businessman is estimated to have a fortune of about £430million.

This includes money he made from Redrow, plus £90million from the sale of a stake in luxury hotels chain De Vere Hotels & Leisure group.

• Rival housebuilder Persimmon (up 28¼p at 375½p) swung to an annual pretax loss of £780million after it wrote down the value of its land and other assets by a whopping £904.8million. There was no final dividend.