Countryside's top shareholder urges company to find buyer after Inclusive bid

By Tommy Wilkes and Simon Jessop

LONDON (Reuters) - The biggest shareholder in British housebuilder Countryside Partnerships has urged the board to find a buyer for the group, and to include Inclusive Capital, which has made two bids for the company, in the sales process.

U.S.-based activist fund Browning West, which owns 15.3% of Countryside, urged the board to conduct a strategic review of the group, which it said would perform better privately owned or as part of a larger business after board actions led to a "significant destruction of shareholder value".

The letter, dated May 30 and seen by Reuters, follows two offers to buy the company by Inclusive Capital (In-Cap), Countryside's third-largest shareholder.

Countryside on Monday said it had rejected the "undervalued" takeover offer from the San Francisco-based investor, which valued the business at about 1.47 billion pounds ($1.84 billion), a premium of about 23% to the stock's last close.

"I urge the board to immediately undertake a thorough process to consider all strategic alternatives for the company," Browning West founder Usman S. Nabi wrote in the letter.

A spokesperson for Countryside declined to comment and referred to the firm's Monday statement, in which it said In-Cap's offer failed to take into account, among other things, its market leading position in mixed tenure home building.

Countryside has struggled to please shareholders in recent years and its performance has lagged rivals at a time when listed UK housebuilders have benefited from strong demand for new homes. Even after In-Cap's bids, Countryside shares are down 37% this year.

Nabi called In-Cap a "credible bidder" for Countryside and said it should be included in a sales process, although he did not say the board should accept the current offer.

In-Cap, a sustainability-minded activist fund run by hedge fund veteran Jeff Ubben, said on Monday it had made two approaches to the company's board, who refused to engage with the investment firm and give it access for due diligence.

Among the "mistakes" made by the board, Nabi said it had been slow to replace its chair and chief executive, who stepped down in January.

Browning West has long been a thorn in the side of management. Countryside's then-chairman stepped down in 2020 after the shareholder called for him to go and for its own representative to join the board as part of efforts to break up the company.

Browning West partner Peter Lee joined the board in January.

Nabi said he had received calls from other large shareholders who want Countryside to conduct a strategic review, and that several of them had approached the board with their view. He did not identify the other shareholders

(Reporting by Tommy Reggiori Wilkes and Simon Jessop; Additional reporting by Aby Jose Koilparambil; Editing by Jan Harvey)