Berkeley chiefs eye £2.3m deal bonus

UPMARKET housebuilder Berkeley Group has hung the for sale sign over its Crosby Group Northern and Midlands homes subsidiary with a £500m asking price.

The auction is being triggered through a complex deal with Crosby's executive team, led by Geoff Hutchinson, which could earn them a £2.3m cash bonus if they sell the business at what Berkeley thinks is the right price within the next 364 days.

Tony Pidgley, Berkeley's founder and managing director, said the deal with Hutchinson, 44, who resigns from Berkeley's main board today, was innovative and may set the pace for maximising shareholder value.

Berkeley has agreed to pass 50.01% of the shares in Crosby to its executives. However, they take the economic benefit and voting rights from their shareholdings in Crosby only if they make £450m of operating cashflow from Crosby within seven years and pass all of it back to the main Berkeley group.

After Hutchinson and his team have met this target any cashflow is split 50-50 between Berkeley and Crosby. Pidgley said: 'The deal allows someone to buy it sooner for a higher price if anyone thinks we have undersold the business to Geoff and his team. Either way shareholders win out - they are guaranteed value over a seven-year period and share in the upside thereafter.'