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Summary
- Countrywide received a takeover bid worth £82 million from its rival Connells
- Company’s share saw a sharp increase of 45 per cent on Monday reacting to the latest development
- The proposal is at a nascent stage and Connells has signalled that any offer is provisional
Britain’s property group Countrywide Plc, which owns Hamptons International and Gascoigne-Pees, has received a takeover bid worth £82 million from its rival Connells.
The FTSE 250 company, which is Britain’s largest listed estate agent group with 731 outlets, revealed that it had received an indicative bid of 250 pence per share in cash by Connells, an estate agency and property services company.
The company said in a statement that the deal is at a nascent stage and Connells has signaled that any offer is provisional upon, including other things, completion of assenting due diligence and the approval of the board of Countrywide.
Meanwhile, Connells, which is a subsidiary of Skipton Building Society and has about 600 branches, confirmed that it had approached Countrywide’s board on 26 October and before deciding whether to make an offer will be was examining its account books.
Connells added that Countrywide’s board hinted that the firm is keenly looking for recapitalisation to cut its net debt and reduce its exposure to its lenders. The board was of the view that the company is not in a position to implement its business strategy for the short and medium-term in an absence of a recapitalisation.
The Countrywide’s board, as Connells indicated, fears that the company could end up in administration, with the firm’s shareholders investments turning red.
The latest development comes after another rival, LSL Property Services, cancelled plans for a £500 million all-share merger with Countrywide in March in the wake of the volatile market situation due to the pandemic.
The acquisition would have created an incorporated firm with a 14,000 workforce and 1,000 estate agency branches. LSL had said that it is not looking to make an offer for Countrywide, a statement which had come less than a month after both the companies confirmed that they were in discussion for a deal.
Countrywide offers properties on rentals and also sells it via 60 high street brands that include Bairstow Eves and King & Chasemore. The company was worth £750 million when it made its debut on the stock market in March 2013.
The company has also received a £90 million proposal from private equity firm Alchemy Alchemy, who has a 2 per cent share in the Countrywide, in return for rejigging in the management.
Countrywide’s share saw a sharp increase of 45 per cent on Monday, 9 November 2020, reacting to the latest development.
