Connells Agrees to Buy Realtor Countrywide After Bidding War
(Bloomberg) -- Connells Ltd. has agreed to buy struggling U.K. realtor Countrywide Plc after prevailing in a bidding war with a private equity firm.
Connells, a privately owned property firm, will pay 395 pence per share in a cash deal that values Countrywide at about 134 million pounds ($183 million), according to a company statement on Thursday. That’s a premium of about 172% over the share price before the offer period began in November. The deal is expected to be completed in the first quarter of next year.
Countrywide shares rose as much as 14% in London on Thursday morning.
Private equity firm Alchemy Partners had also pursued Countrywide, but its takeover bid faced resistance from activist shareholder Catalist Partners, which owns about 10.5% of the realtor. Alchemy made an improved offer on Dec. 2, but Countrywide’s board has decided not to pursue it, according to the statement.
Traditional real estate brokers such as Countrywide had struggled even before Covid-19 effectively froze the property market earlier this year, with tax hikes and uncertainty around Brexit curbing demand for homes. The company said in October that it was in “urgent need of recapitalization” to reduce debt and strengthen its finances to weather the pandemic-fueled economic slump. Its net debt as of Sept. 30 stood at 90 million pounds, a spokesman said by email.
All of Countrywide’s lenders will be repaid in full under the deal, and Connells will invest in the company’s technology and branch network.
The offer from Connells has the support of about 51% of Countrywide’s shareholders, and will need the backing of 75% to go through, according to the statement.
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