Redrow founder launches bid to seize power

Former Redrow chairman and founder Steve Morgan has launched what appears to be a bid to seize power at the housebuilder after upping his effective stake in the business to 29.9%.

The housebuilder said Morgan was seeking a job on the board but it is unclear at this stage whether he is planning to take the chief executive role.

Both parties refused to reveal what prompted the move but it follows speculation that Morgan was unhappy with the way the board had been running the business he founded in 1974.

A Redrow statement said: “Mr Morgan has proposed that he should join the board of Redrow in an executive role which, together with other proposals, would result in a fundamental change in the composition of the board. The board remains committed to its high standards of corporate governance and is seeking clarity on these board changes and other critical aspects of Mr Morgan's proposal.”

One analyst said: “There's no way he'd want anything else than the top job. It just wouldn't work anyway. Can you imagine Morgan on the board owning a third of the company but not in the chief executive job?”

He added that if it was an attempt by Morgan to turn around the company's fortunes he may have made his move too late.

“The 'Hail the return of the conquering hero' scenario doesn't work. It's not big characters that will mend this industry; the problems are more fundamental than that. He should have made his move 12 months ago.”

Both sides are locked in discussions and Morgan is expected to clarify his position once the talks are complete.

If he ups his stake to 30% he will be forced to launch a takeover of the whole company, although some observers suggested he would find raising the finance difficult in the present climate.

One analyst said that paying anything more than the present market cap of £246m would be expensive.

Redrow shares rose 12% in early trading this morning.