While Countryside’s share price has been sliding over the past year, Inclusive Capital Partners (In-Cap) has built up a 9.2% stake. Now it wants to take the London Stock Exchange listed company private.
In-Cap has twice quietly approached the Countryside board in the past couple of weeks suggesting a takeover deal – and has twice been rebuffed. Now it has gone public with its bid.
“The In-Cap team believes that Countryside shareholders deserve the opportunity to decide on the merits of any offer, and that if an approach is made in good faith, the Countryside board should act in the interests of its shareholders by engaging with the potential offeror and not deny its shareholders this opportunity,” it said today.
It is offering to pay 295 pence per share – an adjusted premium of 31% above Countryside's Friday closing share price of 238 pence.
Countryside's share price reached 570 pence last summer and started 2022 at around 450 pence
Jeffrey Ubben, founder and managing partner of In-Cap, said: “Countryside looks to regenerate areas, and through its mixed-tenure approach supports communities, by developing and building affordable homes for rent and for sale next to higher priced private homes. In working with land owners, housing associations and government authorities, Countryside seeks to address an acute need for high quality affordable housing in the UK. We believe Countryside's success is linked to this need and also will be the source of future growth.
“In-Cap was founded to support businesses which generate positive impact on the environment and society. We believe Countryside is meeting a critical societal need and as a holder of approximately 9% of the issued share capital of Countryside, In-Cap believes Countryside is best positioned to serve this role and to succeed as a private company under ownership of investors with a long-term investment approach.”
He continued: “In contrast, the board of directors of Countryside has presided over the flawed acquisition of Westleigh in 2018, a dilutive equity financing in 2020, and the appointment of a chief executive officer with little to no prior public company executive experience that oversaw overly ambitious expansion into new geographies and investment into excess manufacturing capacity that is now generating losses.”
Countryside confirmed that In-Cap made its first proposal on 14th April in relation to a possible offer of 225 pence per share in cash and a contingent entitlement of up to a maximum of 59 pence, structured as a contingent value right. The second proposal of 295 pence per share was made on 17th May 2022.
It said: “The board of Countryside carefully evaluated each of the proposals together with its financial adviser, Rothschild & Co, and concluded that the proposals materially undervalued the company and its prospects.”
It added: “The board is confident that, with a clear strategy in place following the operational review announced on 7th April 2022, Countryside has a strong platform to deliver value in excess of the proposals.”
Under City takeover rules, Inclusive Capital has until 5pm on 27th June to declare one way or the other whether it intends to make a firm offer for the Countryside.
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