Barratt officially takes ownership of Redrow shares

Barratt has officially taken ownership of Redrow’s shares, with the smaller housebuilder removed from listing on financial markets.

Yesterday evening, the pair announced that, “following the delivery of a copy of the Court Order to the Registrar of Companies”, the scheme had “become effective”, with the entire share capital now owned by Barratt.

Applications were made to the Financial Conduct Authority and the London Stock Exchange to suspend and cancel Redrow’s listing on the official list and the trading of Redrow shares on the main market.

The former was expected to happen this morning, the latter tomorrow (Friday) at 8am.

A request was also made to admit more than 450 million new Barratt shares to listing on the official list and to trading on the LSE’s main market, which is also expected to take place by 8am tomorrow.

However, the two businesses will continue to operate independently until the Competition and Markets Authority has formally accepted the undertakings proposed to address competition concerns that the regulator had previously raised.

This is due to an initial enforcement order served by the CMA to prevent the merger prejudicing its inquiry.

As a result, some actions will await the approval of the CMA, including changing the name of the company to Barratt Redrow, appointing Matthew Pratt to the combined group board along with non-executive directors Nicky Dulieu and Geeta Nanda.

>>See also: Barratt’s acquisition of Redrow: the numbers and key players

>>See also: Concrete frame defects and fire safety work cost Barratt an extra £130m

The CMA yesterday issued a statement, which said there were “reasonable grounds for believing that the undertakings offered by the Parties or a modified version of them, might be accepted”. It will publish the full text of its decision shortly.

The CMA had raised concern that the £2.5bn merger deal might disadvantage homebuyers in an area around Whitchurch, Shropshire, if a resulting loss of competition leads to higher house prices or lower quality homes. 

The 11-mile area contains four Barratt developments and a Redrow development.

Barratt and Redrow are offering undertakings to remedy this in an attempt to avoid a full-blown ‘phase 2’ investigation.

The CMA has until 18 October 2024 to decide whether to accept Barratt and Redrow’s undertakings, with the possibility to extend this timeframe to 13 December 2024 if it considers there are special reasons for doing so.

The merger deal would mean Barratt, already UK’s largest housebuilder, increasing its turnover to more than £7bn (based on 2023 figures).