It has emerged that HBOS invested an estimated 拢100m when it bought its stake in Miller Group last month, writes Tom Bill.

Although no details of the deal have been released, sources have confirmed the bank bought a 20% share in Miller, helping to resolve a shareholder dispute at the 拢1.3bn turnover housebuilder and contractor.

Based on a market value of between 拢450m and 拢500m, a fifth of the company would have cost between 拢90m and 拢100m.

A Miller spokesperson refused to comment on the figures. She said: 鈥淎ll financial details of the HBOS investment are confidential; as such no breakdown of shares is available.鈥�

At the time Miller called the stake a 鈥渟ignificant minority interest鈥�. One financial source said 20% was 鈥渢he level where you are a financial investor rather than having a direct sway over the business鈥�.

The remainder of Miller鈥檚 shares are controlled by chief executive Keith Miller, his family and the employee benefit trust. It is not known what stake each now holds but prior to the deal Miller and his family held 89% and the trust had an 11% stake.

For years HBOS lent housebuilders cash and watched them get rich. They can see now that it鈥檚 better to invest.

City source

The dispute broke out last November when a group of rebel family shareholders led by James Miller, Keith Miller鈥檚 cousin and a former chairman of Miller Group, said it planned to sell a 64% stake in the company.

A compromise was reached with the help of the HBOS investment, which allowed the rebel shareholders to sell their shares.

Last month HBOS bought a 40% stake in Scottish housebuilder Tulloch Homes for 拢27.5m and one City source said he expected more to follow when the credit crunch relented.

He said: 鈥淔or years they have lent housebuilders cash and watched them get rich. They can see now that it鈥檚 better to become directly or semi-directly involved in the business by investing."

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