Struggling estate agent Countrywide has moved a step closer to handing control to private equity after rejecting a rival’s £82million takeover offer.
The owner of Hamptons International and Bairstow Eves said its board ‘unanimously’ opposed the 250p per share offer from Connells, although it provided no further explanation.
Connells urged shareholders to take no action and said it was ‘considering options’ – a sign it may be preparing a fresh offer.
The owner of Hamptons International and Bairstow Eves said its board ‘unanimously’ opposed the 250p per share offer from Connells, although it provided no further explanation
But in a further blow to its advances, Countrywide received a second offer from private equity firm Alchemy Partners, which immediately won backing from its biggest shareholder.
Hosking Partners, owned by tycoon Jeremy Hosking, said the fresh proposal was ‘a major improvement’ and pledged support. The firm has a 20.9 per cent stake in Countrywide.
Alchemy is willing to inject £70million into the business, down from a previous £90million, in exchange for a controlling stake of at least 50 per cent. Its plan had previously been rejected by disgruntled shareholders.
But Alchemy now says it will buy their shares for 250p each, matching Connells’ offer, allow them to retain their stake or invest further capital.
However Alchemy also said it would scale back the original £50million it had proposed to repay Countrywide’s lenders.
Hosking said the deal now implied a value of ‘around 400p’ per Countrywide share and said the Alchemy deal was a major improvement on its first effort.
Countrywide stopped short of recommending the new offer but said it would let shareholders sell their shares to Alchemy, retain their existing stake or invest further. It is still considering alternative options such as raising cash from existing shareholders.
The announcement came after former chairman Peter Long, who had championed the Alchemy proposal, was ousted last month and former William Hill boss Philip Bowcock parachuted in to lead rescue talks. Countrywide has debts of £90million and has been forced to shut branches.
Connells has claimed that Alchemy’s plan will not turn Countrywide around.
It said: ‘Connells urges shareholders to take no action in relation to the possible revised Alchemy proposal.’
Shares in Countrywide rose 6.4 per cent, or 14.4p, to 241p.
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