Sky News has learned that Countryside Properties, which has a market capitalization of over £ 2 billion, has been invited by Browning West to sell its homebuilding arm – one of its two main operating divisions.
Browning West also wrote to Countryside asking for a seat on the board, according to insiders.
The hedge fund’s request was made several weeks ago and should be followed by more dialogue before the end of the year, they added.
The news of Browning West’s demands comes less than two months after it took a 5% stake in Countryside.
It has since increased its stake to 8%.
It emerged in September that Countryside was one of four home builders facing enforcement action from the competition watchdog for scamming tenants into charging them excessive rents.
The company’s house building business accounts for around 40% of the group’s total revenue, the faster growing partnership business of Countryside – which works with local authorities and housing associations to provide affordable housing and privately rented – accounting for the majority of its sales.
In July, it raised £ 250million through a share placement, making it one of hundreds of listed companies to attract investors for new capital during the coronavirus pandemic.
He said at the time that he wanted to increase the operating profit of his partnership business to 75% of the group’s operating profit, but showed no sign of willingness to divest a home construction business. which is one of the largest in the south-east of England.
Browning West’s push for a breakup will put pressure on David Howell, the former travel industry executive who chairs Countryside, to vigorously defend the company’s strategy.
The hedge fund has been a vocal investor in Domino’s Pizza Group, where its founder, Usman Nabi, now sits on the board.
A Countryside spokesperson said: “ We have engaged in an in-depth private dialogue with Browning West, as we do with all of our shareholders.
“We have a clear strategy to accelerate the growth of our Partnerships division as we focus on executing.
“It is the responsibility of Countryside’s board of directors and management team to do what is best for the company and create value for all shareholders.
“Browning West has raised issues that the board and management have already considered and we will continue to work with Browning West and our other investors in this context. ”
A source close to Countryside said its shares had risen nearly 85% since its IPO in February 2016.
Browning West declined to comment.
A number of large London-listed companies have been targeted in recent months by activist investors, the latest example of which was St James’s Place, the wealth manager.
Others who remain in the activists’ crosshairs include Barclays and Pearson.