Connells attempted acquisition of Countrywide has taken a dramatic turn after the estate agency hiked its offer to the industry giants’ shareholders by 30% to £3.25p a share.
This is an increase from its original offer of £2.50 a share revealed last week, but which was rejected by the board of Countrywide in favour of the latest Alchemy deal.
Connells’s CEO David Livesey (pictured) says getting Countrywide back on track “requires sustained investment and gritty operational improvement over many years. Connells is offering a clear vision for the future, not yet another turnaround attempt based on wishful thinking and flaky financing.”
Connells says its new offer is superior to the Alchemy offer revealed on 2nd December, which it says could leave Countrywide with high levels of debt and significantly less capital to invest in turning the company around.
It also means Connells is willing to pay Countrywide’s beleaguered shareholders a 124% premium on its current share price.
The offer follows discussions between Connells and Countrywide’s shareholders, who are largely a group of half a dozen City investment firms each holding up to 10% of its shares.
Many of these have seen their holdings nose-dive over the past year or so as Countrywide’s share price has plummeted, while others have been hoovering up shares in expectation of a takeover.
“Under the stewardship of Connells’ experienced and successful management team, the combination will stabilise and enhance Countrywide’s business for the benefit of its customers, employees and other stakeholders,” says Connells.
“Under the Offer, all of Countrywide’s lenders will be repaid in full and additional investment will be provided, giving the business the financial strength to recover from the under-investment of recent years.”
Connells also says it does not believe the deal would be referred to the CMA over competition concerns.
Livesey says: “Countrywide desperately needs a deliverable solution to its current financial problems and lack of strategic direction.”