Countrywide, the largest listed UK property services firm, has revealed that it is in takeover discussions with Connells, a rival property firm. Connells has made a bid for Countrywide at £82m – 250 pence per share.
Countrywide said: “The approach is at an early stage and Connells Limited has indicated that any offer is conditional upon, amongst other things, completion of confirmatory due diligence and the recommendation of the board of Countrywide.
“There can be no certainty that an offer will be made, nor as to the terms of any such offer, should one be made.”
The prospective acquisition comes weeks after Alchemy, a private equity backer, acquired a majority stake in Countrywide, and proposed a management reshuffle, with chairman Peter Long to be replaced. Meanwhile, Connells is studying Countrywide’s books before making a decisive offer.
Connells said: “The board of Countrywide has indicated that Countrywide is in urgent need of recapitalisation to reduce its net debt and lessen its exposure to its lenders. The board of Countrywide believes that, in the absence of a recapitalisation, Countrywide is unlikely to be able to execute its business strategy over the short and medium term and there is a risk that it could end up in administration, with Countrywide shareholders losing all or a substantial portion of their investment.”
The discussions come after a proposed deal between Countrywide and rival broking firm LSL Property Services, which would have seen the birth of a £470m company, were called off in March.