Huge majority of Foxtons shareholders vote through D&G acquisition

The deal, which many within the industry consider to be in Foxtons favour, includes the disposal of D&G's sales arm to CEO James Evans.

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Some 99.8 percent of Foxtons shareholders have approved the agency’s purchase of rival Douglas & Gordon (D&G) for £14.25 million.

The deal, which included D&G and two subsidiaries, was always unlikely to face much shareholder opposition given industry opinion considers Foxtons to have got D&G ‘for a song’, a deal that has already added some £16.8 million in turnover to its bottom line since the deal was originally inked in October last year.

Even better, Foxtons recently agreed to offload the loss-making sales operation of D&G to its CEO James Evans (pictured) via his company Lochlan Holdings for a ‘nominal fee’, including all of its expensive-to-run branches – albeit with restrictive covenants in place.

These prevent Evans from starting up a rival lettings business or poaching former staff for a period of four years.

The Negotiator understands from industry sources that Evans had been pushing for a similar deal via a management buyout prior to this, but the family who controlled Douglas & Gordon had wanted to sell the whole business, largely for sentimental reasons.

So Foxtons shareholders, who voted for the deal at the company’s General Meeting this morning at its swish offices at in Chiswick, West London (main pic), are no doubt happy at the value the deal presents.

Warnings

But shareholders were also warned that if they did not vote through the acquisition and disposal through at today’s meeting, Foxtons would be forced to continue supporting D&G’s loss-making sales division – and that cost of closing it down would be far greater than the cost of offloading it to Evans with a £3.6 million cash-in-the-bank sweetener.

Foxtons has also warned that there is a risk of higher-than-expected customer attrition by the former D&G lettings business because of the loss of the ‘Douglas & Gordon’ brand.

“There is also a risk of the D&G lettings business failing to attract those new customers who are loyal to or have a preference for the “Douglas & Gordon” brand over the ‘Foxtons’ brand.”

Shareholders clearly thought the risk was worth it.


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