Redrow shares slumped by 8.3% on Tuesday after the company’s chairman Steve Morgan sold a 7% stake in the company.
Morgan, who announced last week that he would “ease back” from his full-time position into a non-executive role, offloaded the £153m stake through an investment vehicle and a charitable trust.
After the sale, Morgan’s stake in the company still stands at just under a third.
The news comes after Berkeley Group chairman Tony Pidgley cashed in £26.8m of shares on Thursday last week. Pidgley sold the shares just 24 hours after facing down a shareholder rebellion over the group’s pay deal.
Some 16% of the group’s investors voted against the group’s remuneration policy at its annual general meeting (AGM) where shareholder advisory group Glass Lewis called on investors to reject the deal awards, labelling them “grossly excessive”.
The share sales by two of the biggest names in housebuilding have given rise to concerns about the outlook for the sector.
“When Tony Pidgley and Steve Morgan sell shares in the companies they founded, investors take notice,” said Jefferies analyst Anthony Codling. However, he said he thought it would be wrong to read too much into the deals, pointing out that both Pidgley and Morgan still have major stakes and therefore “a lot of skin in the game”.
“It is our assessment that the UK continues to experience a chronic undersupply of housing,” he added. “This, coupled with an existing homes market in paralysis and the stimulus of Help to Buy, places the UK new-build housing market in a very strong position, in our view.”
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