In August 1874, dissatisfaction with the 'uncomfortable and ill-arranged structure' led Mr. W. D. Deighton to form a limited company, with a capital of £5,000 to purchase and rebuild the theatre. Captain Castle was Chairman of Directors, Mr. Deighton Hon: Secretary, and Lord Dudley headed the list by taking £1,000 worth of shares. The object of the company was not to have large dividends but 'to remove from the Theatre Royal, Worcester, the stigma which has for so many years attached to it, and to place it on such a footing that the legitimate drama may be properly and effectively put upon the stage ....'
Mr. Phipps, the well known theatrical architect, was engaged to supervise, and Thomas Dixon of Worcester, was the builder. It was reported that the old building had held only £35 at the ordinary prices, (which was much less than the earlier one), and that the new one would accommodate 1,544 persons, with a money value of £82.