Martin & Co parent company The Property Franchise Group (TPFG) has today confirmed that it is rejecting yesterday’s Belvoir merger offer, citing the success of its hybrid arm EweMove, and its strong dividend performance.
“The Board is confident in delivering further growth and returns to TPFG shareholders through both capital appreciation and its progressive dividend policy and sees no merit in any further discussions with Belvoir,” a statement from its board says.
The statement also says the offer significantly undervalues TPFG, does not add any premium to TPFG’s shares, and that the cash offer would be funded through a new credit facility, “significantly increasing the level of debt in the enlarged group”.
TPFG also says the company’s dividends to its shareholder have been stronger than Belvoir’s over the past three years, and that the extra debt would put this “under pressure”.
TPFG also says that its EweMove business, which it bought last year in a £15m deal, puts it in a stronger position than Belvoir, which does not have an online or hybrid business.
“We are pleased to report that [EweMove] has performed in line with management expectations since the half year and has been cash generative during this period,” the TPFG board says.
But City investors clearly take a different view on the possibility of the two companies merging.
Three big investment firms have bought large number of shares in Belvoir following the announcement yesterday of its attempted hostile takeover of The Property Franchise Group.
They are Liontrust, Legal and General and Octopus Investments. The latter is the venture capital trust that invested heavily in Zoopla and has strong links to ZPG’s CEO Alex Chesterman.
In February this year Octopus its final tranche of shares in Zoopla after being an investor in the portal giant for nearly eight years.
The three firms have between them bought approximately 2.3 million shares in Belvoir, spending £2.4 million of investors cash during the buying spree.
Yesterday Belvoir went public with its hostile takeover bid for Belvoir after it initial approaches to the board of TPFG were rebuffed.