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LATEST: Connells’ Countrywide bid ‘would see job losses, branch closures’

Claim is made by Alchemy, which is scathing of the Connells takeover bid and says its offer will satisfy all shareholders.

Nigel Lewis

alchemy

Investment firm Alchemy has laid its cards on the table following Countrywide’s rejection of Connells’ offer for the estate agency giant, matching its offer of £2.50 a share.

It has also claimed that a Connells takeover would lead to ‘multiple branch closures and job losses’.

Alchemy, which remains the Countrywide board’s preferred bidder, says its offer to shareholders gives them the opportunity either to sell their shares or to participate alongside Alchemy in the recapitalisation of the company.

This solves a problem for Countrywide’s shareholders, who are split between those who want to exit and those who believe it has a future.

Alchemy believes this feature of the proposal represents the only way to satisfy enough shareholders to deliver a transaction – and that a conventional takeover – as offered by Connells – will not succeed.

So far Alchemy has secured promises from shareholders holding 44.8% of Countrywide’s issued share capital as of yesterday.

This includes Hosking Partners, Oaktree Capital and Brandes International but not, unsurprisingly, Robin Paterson’s Catalist.

Experience

In response to Connells’ criticism that it has no experience of running a large estate agency, Alchemy has hit back saying its long-standing investment in Countrywide, and its separate ownership of a letting agency, give it a good understanding of Countrywide’s ‘business lines’.

Alchemy says it also has an ‘outstanding new management team’ waiting in the wings, as well as new chairman Carl Leaver.

“Alchemy firmly believes that Countrywide has a strong future as an independent, listed company; however, unlocking that potential requires a comprehensive recapitalisation, a new management team and a reinvigorated governance structure,” it says.

Branch closures

Despite Connells offer being rejected, Alchemy has still taken time to slam the defunct deal, saying Connells’ offer to buy all the company’s shares does not give an opportunity to shareholders who want to stick around and see their stock increase in value.

Most damning, Alchemy claims Connells’ offer is “likely to involve wholesale rationalisation of the Company’s business involving multiple branch closures and job losses, and would also likely be investigated or blocked by the Competition and Markets Authority”.

The Alchemy deal includes raising £70m to clear the company’s debts partly through a new share issues and also new lending.

December 4, 2020

One comment

  1. The world is full of individuals and organisations who think they know how to run Estate Agencies without previously working in the industry and they all fail. Connells would know how to make a success here, but they would be tough shrewd operators, but would need to be.

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