黑洞社区

鈥淓motionally, it鈥檚 been a roller-coaster鈥�, says Alan Cherry of his five-month struggle to realise the long-cherished ambition of buying the company he chairs. Now he may be just a week away from taking the keys to Countryside Properties.

鈥淭here have been moments almost day by day over the past few weeks, when you think: 鈥楾hat鈥檚 it鈥�,鈥� he says. But the real breakthrough came two weeks ago when Rock Pacific, the investment fund that was Countryside鈥檚 biggest shareholder, and which was threatening to bid itself, said it would support the Cherry family鈥檚 280p-a-share offer for Countryside.

Cherry says it was a 鈥渂ig relief鈥� when Rock Pacific finally called him at his office to say it would support the buyout and sell Cherry its 28.1% stake. This meant that the Cherry family鈥檚 biggest stumbling block was removed 鈥� at a cost of 拢4m, which was how much the family had to find to increase its bid from 275p a share to 280p. The final bid valued the company at 拢222m.

It is not quite a done deal yet. Countryside鈥檚 other shareholders have until Wednesday to vote against the buyout. They are unlikely to do so, however, as the only rival bid was for 250p made by an unknown third party.

Cherry is clearly disappointed that he was growled into increasing his bid: 鈥淚t is above the price we would have preferred to pay, but if you want something enough you will stretch yourself,鈥� he says. 鈥淚t鈥檚 human nature.鈥�

Over the past five months, the Cherrys have had frequent meetings with Daniel Levy, a shareholder in Rock Pacific 鈥� and chairman of Tottenham Hotspur 鈥� and Paul Kemsley, Rock Pacific鈥檚 chief executive. These have been tense. As Cherry puts it: 鈥淩ock was not a welcome interest, to be frank. We did not see eye to eye on the way the business should be taken forward.鈥�

The Cherry family 鈥� Alan and his two sons Graham and Richard, who are chief executive and new business director respectively 鈥� have been talking about the possibility of a management buyout for the past three years.

If the buyout is successful, the Cherrys will increase their 17% stake to 50%; Alan, Graham and Richard will each take one-third of this. The family鈥檚 backer, Halifax Bank of Scotland, will own the remaining half, but the Cherrys have the option to buy that at a later date. Outright ownership, according to Alan, is Graham and Richard鈥檚 ultimate aim.

Although Cherry admits to being 鈥渁 young 71鈥�, he says one of the key motivations for the buyout was to enable his sons to increase the amount of equity they had invested in the company. This will increase their financial gains and equalise control of the company.

鈥淭hey will be partners in terms of equity, and there will be no question of me being the big ogre,鈥� says Cherry.

Another motivation for the buyout was Cherry鈥檚 determination to end speculation in the City, and among other housebuilders, about a possible takeover of the company. Countryside was the target of criticism from analysts and investors last year after it posted three profit warnings in what was regarded as a boom time for the housing market and Countryside鈥檚 rivals.

It鈥檚 above the price we would have preferred to pay, but if you want something enough you will stretch yourself

Alan Cherry

This criticism probably made the buyout easier to achieve, as it led to a dip in the value of Countryside鈥檚 shares. Cherry dismisses accusations that the buyout was opportunistic, or that he bought the company on the cheap.

He insists that 280p is a good price, and there have been no rival offers to suggest that it undervalued the company.

Cherry says Countryside鈥檚 uneven financial performance is the result of its focus on regeneration work. Regeneration projects tend to lead to a lumpy flow of work, and do not therefore lend themselves to the kind of smoothly ascending graphs and short-term financial gains that the City likes to see.

鈥淰olume housebuilders such as Persimmon, Wimpey and Taylor Woodrow have the volume and can deal with it,鈥� he says. 鈥淯nless you鈥檙e like Persimmon, verging on the FTSE-100, you are not able to satisfy the short-term aims of the stock market investor.鈥�

He also rejects the notion that a public company was not the right place for a boardroom run by three members of the same family. 鈥淲hy not?鈥� he asks. 鈥淭hat鈥檚 how the likes of Sainsbury鈥檚 and Cadbury started out, and I have worked very successfully with my two sons for 20 years.鈥�

The past few months have been unsettling for the company, for the Cherry family, for the staff, for the shareholders and for Countryside鈥檚 clients and partners. But now that the uncertainty surrounding the buyout looks set to end, Cherry says it will be business as usual.

Countryside will continue to focus on regeneration. It is already working with English Partnerships in Greenwich, south-east London, and has recently been selected by Salford council to regenerate the town.

However, life will be different in some ways. Countryside will be freed from the administrative shackles that come with reporting to the stock exchange.

Cherry says: 鈥淲e spent 60 days a year with financial press relations people, analysts and shareholders. We鈥檙e not grumbling, but we will have 60 more days to apply ourselves to the nuts and bolts of the business.鈥�

Cherry has no intention of hanging up his boots just yet. And after those five months of uncertainty and speculation, he is looking forward to getting back to his day job.