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Bombshell: Connells begins bid to buy Countrywide

Connells has made a preliminary move this morning to acquire the struggling behemoth, and has until December 7th to make a formal offer.

Nigel Lewis

countrywide

Connells has made a bid to buy Countrywide for £2.50 a share, dropping an unexpected bombshell into the ongoing saga at the UK’s largest estate agency and throwing the company’s debt restructure plan into disarray.

The opening offer is £1.05p more than Countrywide’s current share price, and values the company at £126,5 million.

Countrywide notified investors of the approach early this morning, which it says is at an early stage and is conditional on Connells completing the usual due diligence on the behemoth, and gaining a recommendation from its board.

Connells has until 5pm on the 7th December to announce whether it intends to proceed with the purchase.

“There can be no certainty that an offer will be made, nor as to the terms of any such offer, should one be made,” says its Company Secretary, Gareth Williams.

In light of this development, Countrywide has decided to postpone its planned special general meeting ‘until further notice’ at which shareholders were due to vote on whether to accept its debt reduction plan.

Debt plan postponed

On 22nd October Countrywide revealed that it is to raise a further £165 million and announced a new chairman, former M&S digital chief Carl Leaver, and a new CEO, who will be announced soon.

The new cash was to be via a £90 million capital raise through an investment by private equity firm and shareholder Alchemy. This will be via a 66 million share issue and a new £75 million loan from its existing lenders with a four-year term.

“Accordingly, Countrywide shareholders should take no further action in connection with the Proposed Transaction,” says Williams.

“In the meantime, the Board will continue to engage with its shareholders to examine all potential options to deliver a sustainable capital structure for the Company and to maximise shareholder value.”

Although the statement does not mention it, it is likely that the deal would also have to be approved by the competition regulator the CMA; 600-branch Connells is ultimately owned by the Skipton Building Society, which also operates the Sequence chain of estate agent branches.

November 9, 2020

One comment

  1. Can wounded Dinosaur Countrywide plc with its failed ‘back to basics’ change into a ‘back to profits’ enterprise if it swops management team at the top, and has cash. Is the future of agency in the UK superbrand corporates, or online or even public self listing using emerging technology.

    Maybe with ‘Zillow’ unfurling its blueprint across the pond, this deal or no deal between Skipton who only know how to make profit through excellent management, and Countrywide the sad clown act, might in a few years be seen as the last great, old scholl estate agent deal that was done prior to ‘new residential agency models that washed in during the 2020’s’ – where the tech savvy property consumer dictated the change to how how the property asset was transacted.

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