Founder closes in on Redrow bid as deadline nears

By Rosalba O'Brien

LONDON, Oct 2 (Reuters) - A consortium led by the founder and executive chairman of Redrow is in talks to raise its offer to buy out minority investors in the British housebuilder, as haggling continues ahead of a Thursday deadline.

Steve Morgan and the consortium made an approach at 152 pence per share in August, which would have valued the firm at 562 million pounds ($908 million).

But discussions are now taking place at around the 165 to 170 pence price range, a source close to the deal said on Tuesday.

The original deadline for the potential bidders to make an offer or walk away came and went last Friday as shareholders spoke out in the media on their intention to fight for a higher price.

The consortium was granted an extension to Thursday, although this could be extended again.

A Redrow spokeswoman said on Tuesday that the committee of independent directors the company had established to look at the bid was focussed on getting the best deal it could for minority investors, but declined to comment beyond that.

Shares in the company have risen gradually over the last week to trade at nearly 159 pence on Tuesday, indicating the market thinks it likely the price will be raised.

The bidding consortium of Morgan's Bridgemere Securities, Penta Capital and Toscafund Asset Management already control 54 percent of the company, making a rival offer unlikely.

Morgan, also the owner of English second-tier soccer club Wolverhampton Wanderers, founded Redrow in 1974 and floated it 20 years later.

He left in 2000 but rejoined nine years later in a boardroom coup at the height of the financial crisis, which hit Redrow particularly hard.

The company has been a recovery story since then, pinning its growth on high-margin premium family homes that led it to 43 million pounds pretax profit in 2012, up 70 percent on the previous year.

However, like other housebuilders, Redrow has been frustrated by its shares trading at a discount to net asset value over the last four years. The company has also been hindered by its need to sell-on plots bought at high prices during the pre-2008 housing boom and later marked down.

($1 = 0.6192 British pounds)

(Editing by Hans-Juergen Peters)

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Keywords: REDROW BID/