Steve Morgan lines up troops for Redrow coup

Speculation mounted this week that Steve Morgan, the founder and former chairman of Redrow, was planning a joint coup at the housebuilder alongside Greg Locke, chief executive of his Bridgemere property group.

Locke worked alongside Morgan at Redrow for 12 years as regional chairman and main board director. He later became chief executive of David Wilson Homes before joining Morgan at Bridgemere.

Bridgemere and Redrow declined to comment on the speculation that Lock was involved in the bid, but some in the City were tipping him to join Morgan in the boardroom of the company he founded in 1974.

Speculation about a boardroom coup was sparked on Tuesday when Morgan revealed he had upped his effective stake in the firm to 29.9% and demanded an executive role on the board. He is understood to be unhappy with the company’s performance over the past year (see graph below).

Kevin Cammack, an analyst at Cenkos Securities, said: “He’d naturally take Greg with him to Redrow because he has great inside knowledge of the company. My guess is that he’d have a chief operating officer-type role under Steve Morgan as chief executive.”

Another source with knowledge of the situation said: “Steve knows Greg very well as a manager; they are both in it together. Bridgemere also has other guys who cut their teeth in housebuilding at a high level.”

A Redrow statement said the company was considering Morgan’s proposal, which it said would produce a “fundamental change in the composition of the board”.

Cammack said that could mean chief executive Neil Fitzsimmons being ousted. “The juggernaut has just arrived and it won’t be stopped. The question is how many people it knocks down on the way.”