Home » News » What went wrong? Belvoir reveals merger with TPFG DID have green light

What went wrong? Belvoir reveals merger with TPFG DID have green light

Both lettings firms appear to have looked favourably on a deal during early discussions before the Martin & Co parent company changed its mind.

Nigel Lewis

Belvoir merger with TPFGBelvoir has responded to the brush-off delivered by The Property Franchise Group (TPFG) on 19th October which said the merger of the two businesses “would not be in the best interests” of TPFG.

TPFG owns franchised lettings giant Martin & Co and online agency EweMove as well as CJ Hole, Ellis & Co, Parkers and Whitegates with a combined branch count of almost 300 and 50,000 tenanted properties.

The board of directors at Belvoir says it is “disappointed” by the response and that the merger offer made by Belvoir was not an unsolicited one. Also, reading in between the lines of the statement,  TPFG appears to have led Belvoir to believe the merger offer would be well received.

Belvoir merger with TPFG

Belvoir says there was previously a “willingness to engage in discussions expressed to the Board on more than one occasion by TPFG”.

The company says its merger offer was structured to reflect these discussions, which included issuing 0.7150 new shares per TPFG share and 52.2p in cash per TPFG share, but says the cash element of the offer could be reduced and the number of shares increased to reduce the cost of the merger.

Martin & Co image Belvoir merger with TPFGBelvoir also says it still believes that it is the right time for consolidation within the industry to “leverage the growth opportunities in the sector, as acknowledged by the TPFG board, to the benefit of both companies’ shareholder and franchisees”.

Reaching out to TPFG shareholders, Belvoir says despite the extra money that would have to be borrowed to fund the merger, shareholders of the merged companies would not see a reduction in dividend payments, and that the operational cost reductions of the merger would benefit them.

“We are disappointed with the TPFG board’s refusal to discuss the Possible Merger Offer and believe that the shareholders of both companies will recognise the potential benefits that the Enlarged Group ought to be able to generate in the medium term,” says Belvoir Chairman Mike Goddard.

Mike Goddard Belvoir merger with TPFG“We recognise that the TPFG board speaks for approximately 49.3 per cent. of TPFG’s shares but would hope as a matter of process that they will fully consider the merits of the Possible Merger Offer in the context of the TPFG shareholders.”

“The Belvoir board remain very willing to have an open and constructive discussion with the TPFG board about the Possible Merger Offer.”

A further statement from Belvoir is expected soon.

 

November 1, 2017

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