Company founder Steve Morgan owns 40.4% of Redrow. Buying back 10% of the share would ordinarily result in an obligation for Mr Morgan to make a general offer for the whole company in accordance with Rule 9 of the City Code on Takeovers & Mergers.
The board is therefore asking shareholders at the 2016 AGM to approve not just the share buy-back but has also a waiver by the Panel on Takeovers & Mergers of resulting obligations on Mr Morgan.
The board said that it actually had ‘no current intention to repurchase shares’ but it believed that it was in the best interest of the company to retain the right to do so.
“Passing the waiver resolution will give the company the flexibility to buy back its shares without triggering an obligation for Mr Morgan to make a mandatory offer for the company,” the board said.