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On 5 September 2022, Countryside Partnerships plc (Countryside) that they have reached agreement on the terms of a recommended cash and share combination with FTSE 250 developer Vistry Group PLC (Vistry), pursuant to which Vistry will acquire the entire issued and to be issued ordinary share capital of Countryside.

The offer, which represents a premium of 9.1% to Countryside’s closing share price of £2.28 on 2 September 2022, values Countryside at £1.25 bn. The company’s board has agreed to unanimously recommend the cash and shares deal which will see Countryside shareholders receive £0.60 and 0.255 of a new Vistry share for each of their shares. In aggregate, Countryside shareholders will receive approximately 128.4 m Vistry shares under the terms of the agreement.

The proposed combination of the two rival companies has already garnered support from five major Countryside shareholders, including Browning West, Inclusive Capital Partners, David Capital Partners, Anson Advisors and Abrams Capital Management, who collectively own 39.1% of Countryside’s share capital and have irrevocably committed to voting in favour of the deal at the company’s shareholder meetings.

Commenting on the combination, Greg Fitzgerald, CEO of Vistry, :

‘This proposed Combination has a highly compelling strategic rationale. It will create a leader in the Partnerships housing sector, with the scale and expertise to accelerate profitable growth across both Partnerships and Housebuilding, and expand the delivery of much needed affordable housing across England. The proposed Combination will add the strength of the Countryside brand to Vistry's own well established Bovis Homes and Linden Homes brands and will leverage the skills and market knowledge of both the Countryside and Vistry teams.

We believe there is clear potential to generate material value for both Vistry and Countryside Shareholders and wider stakeholders from a combined group with enhanced scale and superior returns and to improve the performance of key parts of Countryside's business. We welcome the support of the Countryside Board and the support we have already received from a significant proportion of Countryside Shareholders for the Combination.’

Inclusive Capital Partners (In-Cap), Countryside's third largest shareholder with a 9.2% stake and one of the supporters who have entered into an irrevocable commitment to vote in favour of the Vistry deal, had previously approached Countryside regarding a for the company in May 2022. However, In-Cap its potential bid for the company in support of the Vistry offer as the San Francisco based investment advisor was said to recognise ‘the significant synergies between the two entities and considerable value creation opportunities for shareholders presented by the combination.’

Jeffrey Ubben, the Founder and Managing Partner of In-Cap, :

‘In-Cap fully embraces the offer for Countryside by Vistry. The combination would create a leader in the growing, asset-light, mixed tenure Partnerships market, and better positions the pro forma entity to address the affordable housing shortage in the UK. On a pro forma basis, we believe that both the Partnerships and Homebuilding segments will be franchise assets with the capability and resources to achieve standalone opportunities for scale. We are excited for Greg Fitzgerald to lead the pro forma entity given his long-tenured experience in the Partnerships and Homebuilding industries. Also, due to significant operating synergies, In-Cap believes the combination delivers superior long-term value relative to its 295 pence per share possible cash offer.’

Countryside’s management has seen significant turnover in recent years. The company’s growth plans were readjusted following an unexpected profit warning in April 2022, which saw £700m wiped off its market capitalisation and caused the one of the biggest FTSE 250 companies to fall by some distance. Former CEO Iain McPherson stepped down shortly thereafter and the shareholders lobbied for a sale of the company after missing out on the housing boom.

On 13 June 2022, Countryside announced its decision to launch a (FSP), after a large number of shareholders concluded that the company would be in a better position to capitalise on the opportunities ahead as a privately owned company or as part of a larger business. In-Cap had opted to participate in the FSP following its announcement in May 2022 that it was considering a possible offer, however the company withdrew its possible offer in favour of the £1.25bn Vistry offer, despite the fact that it is less than In-Cap’s non-binding proposal of £2.95 per share in May 2022 which valued Countryside at £1.5bn. However, as one of the largest shareholders in the company, In-Cap has been pushing for a sale of Countryside in order to capitalise on better opportunities available to shareholders which it believes the Vistry offer is more likely to deliver on a long-term basis.

Shares in Countryside jumped 7.9% following the announcement, signalling that investors are reacting positively to the news of the potential £50m synergies created by the combined business.