Redrow shares fell by as much as 8% on Tuesday after chairman Steve Morgan sold his stake in the housebuilder.
Two of Morgan’s vehicle’s Bridgemere Securities Limited and the Steve Morgan Foundation sold 25.9m ordinary Redrow shares at a price of 550p per share. This represents 7% of the company’s issued share capital.
Although Morgan reduced his shareholding in the company from 40% to 33%, he remains the largest shareholder in the business.
During the company’s results last week, Morgan announced he would be stepping back to a non-executive role.
Cairn Homes was also down 4.38% after founders Michael Stanley, Kevin Stanley and Alan McIntosh sold a total of 15.65m ordinary shares at a price of € 1.70 a share.
Last week, Tony Pidgley, found and chairman of Berkeley Group also sold 750,000 shares in the housebuilder for £26.8m.
Bank of America Merrill Lynch issued a downbeat note, indicating the share sales may suggest the market top for the sector. However, analysts Jefferies differed.
“When Tony Pidgley and Steve Morgan sell shares in the companies they founded, investors take notice and ask if the silverback alpha males in the sector are calling the top of the market. We do not think so,” it said.
Jefferies said even after their share sales, Pidgley remained the fourth largest shareholder in Berkeley, while Morgan, with 33% of the shares in Redrow remained the company’s largest shareholder.
Therefore, it argued the founders of the housebuilders still had “plenty of skin in the game”.
18 September 2017