Countryside Agrees Deal with Activist, CEO Steps Down
Countryside Properties Plc Chief Executive Officer Iain McPherson is stepping down just as the U.K. homebuilder reaches an agreement with an activist investor. Its shares slumped.
The firm reached a deal with Browning West, that includes the appointment of partner Peter Lee to its board. The Los Angeles-based hedge fund has built a stake of almost 9.6% in Countryside and has pushed for a shake-up at the company. In exchange, the investor has agreed not to propose further resolutions at shareholder meetings, circulate statements or seek to remove other directors, according to a statement on Thursday.
“Iain McPherson has led Countryside through a challenging period, including the Covid pandemic and has clarified the group’s strategy, which is to focus all of our resources on our market-leading partnerships business,” chairman John Martin said in the statement.
Countryside has pivoted away from building homes for private sale to focus on its partnerships business that develops mainly low-cost housing for public bodies and affordable housing providers. Trading has been “below expectations” in the company’s first quarter, the company said in the statement, with profit and revenue hit by declining completions.
|Q1 2022||Q1 2021|
|Adjusted revenue||249.8 million pounds||363.8 million pounds|
|Adjusted operating profit||16.5 million pounds||36.6 million pounds|
Countryside fell as much as 19.7% Thursday, the biggest drop since May 2020. The company was trading at 339.6 pence a share at 9:02 a.m. in London.
McPherson will step down with immediate effect. Browning West is Countryside’s second-largest shareholder, according to filing data as of October.
Activist investors build stakes in companies and push for changes they hope will lift share prices. Browning West, started by Usman Nabi in 2019, previously bought a stake in Domino’s Pizza Group Plc, with Nabi eventually named to the board of the company. Nabi previously worked at Perry Capital and Carlyle Group Inc., according to the firm’s website.
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