Hunters Property share price fell yesterday by 10.7% to 67p after it accepted a bid approach from the Property Franchise Group (TPFG).
The Hunters board, which revealed last month that it had received a bid approach, has recommended the acquisition, which will be on the basis of 0.1655 Property Franchise shares plus 43.2p in cash for each Hunters share.
The terms value each Hunters share at about 72p and the entire company at around £24.2m.
TPFG will add Hunters, chaired by Conservative MP Kevin Hollinrake, to its portfolio of high-profile chains, which includes Ellis & Co, EweMove, Martin & Co and Parkers, creating an enlarged franchised estate agent with just over 400 branches. But the merger will lead to job losses to avoid “duplication of functions” and “operational inefficiencies”, the group said.
Richard Martin, TPFG’s non-executive chairman, commented: “I am delighted to confirm that we have reached an agreement with the Hunters Board and major Hunters Shareholders on the recommended acquisition of Hunters. We believe that the Acquisition represents a compelling opportunity.
“Hunters, with its reputable brand, experienced management team, trusted franchisees and strength in residential sales, is highly complementary to our current offering. The Acquisition will enable us to continue to grow our market share in the sector and, ultimately, deliver greater value to shareholders.”
Hunters, founded in 1992 by Hollinrake, has more than 200 branches across the country.
Hollinrake said: “We founded Hunters almost three decades ago with a single small office in York and a huge ambition to offer a brilliant service to our customers and to become the nation’s favourite property agency. Our ambition for our customers and our brand are undimmed and we see this consolidation as the vital next step that allows us to invest in the services, training and technology our customers and franchisees need.
“The success we have achieved is a tribute to the incredible efforts of the thousands of people who provide the service on the ground and the passion and commitment of our management team. I am so grateful, and indeed moved, that every member of our network remains faithful to our original vision and values and I know that they will continue to do so.”
Comments (9)
Most of these branches dont make any profit. Good luck anyway.
Yet many are market leaders in their respective areas. Probably best not to make sweeping generalisations without visibility of the facts.
Financially the deal is not a good one. The blurb makes it clear that jobs are not going to be lost and cost savings will be minimal. It’s an exit plan for Kevin Hollinrake and his partners and PFG has overpaid for the privilege.
Their little woolly cousins have been gobbling up PFG branches. Several already this year and a pile of them last year? This results in a closure for PFG when the buyers scuttles off to their back bedroom with a landlord portfolio under their arm and it reduces PFG’s footprint and revenue.
Hunters franchisees might find they are sheep food when exchanges fall off after Easter and this internal “gobbling up” will lead to a shrinking of the Hunters footprint and brand.
Well fair play to TPFG the BODS are certainly a lot shrewder than those at CWD . A big chunk of the purchase price is in paper form in the shape of TPFG shares
Not only does this reduce the amount of hard cash raised to fund the acqusition but also means that those Hunters shareholders involved in building the success of Hunters retain some skin in the game and have every good reason to remain to reproduce that fairy dust at TPFG
Except for the well documented leaving of Kevin Hollinrake
If only CWD had replicated that strategy they wouldn’t have found themselves in the position they are today having to sell out to Connells at a knockdown price.
I wonder if anybody is going to knock at the door at Winkworths?
You are right HoW although there are two ways to look at the equity that the Hunters lads and lassies are exchanging for shares in PFG. It might motivate them or there might be a queue of sellers on both sides, not right now but later in the year. A queue of sellers is not necessary harmful but it may not help the price.
More than likeley there will be golden handcuffs on Frew and Hollinrake for a year or so on selling their shareholdings to stop them from swamping the market and knocking the sP for 6 .
“Shares in Hunters Property plummet after takeover deal is agreed”
There was very little trading yesterday in Hunters shares.As the majority of the offer for Hunters is cash ie 43.2p, the remainder gifted TPFG shares is the variable element in the equation, the SP of TPFG remained steady .
If the current SP of Hunters remains at this level the market is guessing that TPFG share price is likely to fall too
It’s a strange old world , having a few Hunters shares I am now going to be holding some TPFG , shares
It’s a strange old world , having a few Hunters shares I am now going to be holding some TPFG , shares Looking forward to your supportive commentary in the future ; )
Well there is Plenty to like about TPFG and a good strategic move upping the ante on the sales front in the street
Many of the Ewemove franchisees are performing well in a difficult environment .
Certainly Hunters have lost a lot fewer franchisees than Ewemove and long may it continue There was the high profile rebranded franchise in Norfolk with a few branches which went west .
I wonder if Agents Together reached out to the lost sheep at Ewemove?
Some definitely required help and assistance Now potentially having some skin in the game you can take it as read I will be watching closely