HOUSEBUILDER Linden has become the latest victim of the poor stock market sentiment toward smaller companies.

The group, which specialises in developing brownfield sites, is to be bought by its management for 290p a share.

A management statement said that despite delivering "substantial and sustained growth", its share performance had been disappointing because of the prevailing poor investor sentiment towards smaller UK-quoted companies and the housebuilding sector in particular.

It added it believed issuing new shares without significantly diluting existing shareholder value could be difficult to achieve, while taking on significant levels of debt finance could be viewed negatively by investors.

Chief executive Philip Davies, who will be one of the owners of the delisted group, said that since Linden's formation in 1991, reinforced by buying Southampton-based housebuilder Amplevine in 1997, the group had become a "successful brown land developer, with a dedicated management team to its enterprise.''

He added: "The decision to take Linden private at this time allows us to reward shareholders for their support, many of whom invested at the time of the flotation in 1996.

"At the same time, and with support from the Bank of Scotland, we can accommodate higher levels of debt than would have been found acceptable in the quoted arena and we hope that this will enable us to accelerate our growth.''

Linden, which primarily operates in the South, South East and North West of England, has reported a rise in pre-tax profits for the half-year to £6.6 million, from £4.4 million last time.

Turnover was up 45 per cent to £62.5 million.

The group said the average selling price of its houses was £172,500 - up from £152,000 last year.

Shareholders will receive an interim dividend of 3p, up from 2.7p.

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