Connells has bought Schroder Investment Management’s stake in Countrywide, as the company moves a step closer to completing a takeover of the group.
Connells has acquired 1.9 million Countrywide shares from Schroder Investment Management Ltd, a 5.9% stake and Schroder’s entire holding.
Connells now owns or has irrevocable support for the acquisition from shareholders representing 17.2 million shares, or 52% of Countrywide’s existing issued share capital.
The privately owned property firm agreed a deal last week to pay 395 pence per share in a cash deal that values Countrywide at about £134m.
The deal, which is expected to be completed in the first quarter of 2021, will see all of Countrywide’s lenders repaid in full and additional investment will be provided, giving the business the financial strength to recover from the under-investment of recent years.
The acquisition of Schroder Investment Management’s stake in Countrywide is conditional on gaining at least 75% shareholder approval, regulatory approval from the UK Financial Conduct Authority, and the scheme being sanctioned by the High Court of Justice in England & Wales.
“Our primary motivation for the acquisition is to invest in and grow the Countrywide business,” said David Livesey, Connells group chief executive. “We believe that we have the right management team, strategy and investment firepower to work with the talented teams at Countrywide and lead Countrywide into a bright future.”
Comments (10)
After being sacked by countrywide, I think connells need to look into their decisions. And I mean countrywide. Just check the paperwork. Two older, disabled people have been let go – they are ****** awful
Two horrible companies coming together, perfect match
Neither are horrible companies. Connells is a very good example of a large, very well run agency that has done what most other FS backed agengies have failed to do. CW up until the ‘retail’ groupthink disaster was very good at agency and by getting back to basics is becoming good again.
Large scale agency doesn’t have the freedoms of independent agency but the discipline it instilled in its agents has created some of the best independents in the industry.
There is still the odd rogue agency out there but on the whole agency is in a better place than its been since 2011/ 2012.
Having worked for/with both these companies, I affirm they are horrible companies
Ah the voice of disaffected former employee, always a balanced judgement.
There is always the tainted view of the disgruntled to contend with, unfortunately. One does ask how unfortunate someone must be to have fallen out with two separate employers????
What made them horrible?
Countrywide unfortunately was already heading in the wrong direction before the ‘retail’ strategy began.
Changes were rightly identified as being needed, but the choices made by the retail bods expedited pushing it even more in the wrong direction.
I hope Connells sorts the mess out without affecting headcount.
“Whenever you look at any potential merger or acquistion you look at the potential to create value for your shareholders ” Dilip Shanghvi
I think most CWD shareholders would recognise the fact that Connells have the right management team to run Countrywide however they are not being given the opportunity to benefit from that just a complete sell out .
Connells want all the prizes
Shareholders are now being asked to sell themselves short just as the green shoots have appeared where a change of management would do
In addition you would have thought amongst all those businesses CWD bought expensively with borrowed monies there are individuals amongst them perfectly capable of stepping up to the plate at board level or at least there should be.
What has been evident as CWD has been tossed around like a rag , one expensive mistake after another how little sound has emerged from those who run the individual brands .
Quite remarkable that no one has stood up to be counted.
What a timid lot .
Now the FY has just ended it is incumbent of the BODS to give shareholders a trading update which is likely to be positive
Long term shareholders which include past and present staff have seen the value of their shares plummet under the existing regime who no doubt will waltz off into the sunset with a fat payout having ground the company into the ground .
Shareholders may feel particularly aggrieved at those non-executive directors who rollup for the occasional meeting, collect a decent stipend and have watched this horror show unveil before their very eyes ,one costly mistake after another
The Woodentops would have done a better job
Many shareholders which include many CWD staff unfortunately have relied on their shares for a pension
The price being paid by Connells is significantly below that of the market value of CWD in August 2018 when shares were diluted in a capital raise of £140m when Long introduced his Back To Basics strategy .
“The capital refinancing announced today is a significant milestone … It will enable us to build upon the progress we have made to date on our three-year recovery plan as we deliver our return to growth strategy.”
The shares valued had plummeted since 2014 and then a further huge kicking in August 2018
“Within a few minutes of markets opening at 8am the price plummeted from around 50p to a mere 10p”
Since then Countrywide earlier in 2020 announced a share consolidation
This means the recommended offer by Countrywide at 395p a share today is equivalent to just under 8p in August 2018 ie today a further loss in value after the capital raise in Aug 2018 of 20% ,No dividends received by shareholders since
When you look at the value loss over a longer period it’s staggering
To put that into perspective any member of staff as a shareholder ,who had say £400,000 worth of shares in Feb 2014 a market high who would expect to see a comfortable retirement in Jan 2021 those shares would be worth under £14,000 today .with the Connells offer
Retirement dreams shattered
If you remember I called this early and correctly at the beginning of December, I still believe Connells is a good outcome for Connells and Countrywide. Since then I have been reading up into the other runners and think there is a massive opportunity for them to use the money they have available to them, the experience they have and their domain knowledge to build something to fill the opportunity created by a Connells/ CW merger.
Without any doubt CCW will be a very strong competitor to independent agency but it is no more than exists at the moment, it will have legacy, Tupe and branch duplication issues to benefit from and provide challenge, the operation’s bottom line will change but as competition between agencies there will be little change.
What does change is the competition for firm acquisition or merger, instead of two potential buyers there becomes 1. I can see there is a very compelling case to consider building a new economies of scale collaborative agency to rival CCW; David, David and Co need someone to compete against otherwise the main motivation in agency disappears.