Shares in Countrywide jumped in price by 23% yesterday following rumours that an unnamed ‘predator’ fund or company is circling the beleaguered estate agency group.
The rumours were highlighted in an article published online by the Daily Mail’s Money Mail website on Sunday but it only became clear yesterday that the City had taken the rumours seriously.
Countrywide’s share price jumped from 4.89p to 6.5p a share during early trading as buyers sought to hoover up its stock ahead of a potential takeover or sale.
It is also likely that anyone attempting to buy the company or become a majority shareholder would have to pay more than 10p a share, the value Countrywide raised £129 million on last year.
Money Mail only gave ‘City sources’ for its story although it hints heavily that it could be a US hedge fund looking to buy a ‘bargain’ now that much of the cost-cutting and branch closure programme has been completed at Countrywide.
City investment analysts have been saying for some time that its stock could be under-priced and therefore buying the company, or a majority of its shares, might represent a money-making opportunity should the property market pick up soon.
Those with longer memories will remember that at the height of the housing boom prior to the financial crash of 2007/8 Countrywide was bought by a Wall Street equity firm for £1 billion but is worth today, based on its share price, only £78 million.
Read more about the Countrywide share price.