Miller Group: what next - management buy-in or sale?

Family members holding around 60% of Miller Group’s shares are considering what to do with their holding – selling it is one possibility.

If their stance triggered an outright sale, an outsider would probably have to stump up £1bn-£1.2bn to make a viable offer, in order to take on Miller’s assets and its £650m of debt.

Since taking the helm, Keith Miller has transformed the business into a market leader, with results showing thirteen years of profitable growth.

Keith himself holds 17% of Miller shares and his family a further 8%. The group’s employees have 11%.

The family members who have appointed accountants Ernst & Young to undertake “a strategic review to evaluate options in relation to their shareholding” have said that a disposal is a possibility.

However, they go on to say that they wish to emphasize that they believe Miller is “a highly successful house-building, property development and construction group led by a strong management team”.

The family members looking at their options have formed the Aligned Shareholder Group (ASG). One thing in Keith Miller’s favour is that this is not the best moment in time to attempt to sell a housebuilder.

One issue behind their thinking is said to be a desire to make their move one step ahead of changes in capital gains tax rules that will push the tax rate up from 10% to 18% once it becomes law.

Keith Miller is reported to be sure that the board can raise sufficient finance to fund a buy-in.