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Connells this week told Countrywide shareholders that its revised offer to buy the company, valuing it at £104m, was ‘the only tangible and actionable proposition that addresses its real and imminent challenges’.
The battle for control of the country’s largest estate agent has seen Skipton-owned Connells increase its original offer of 250p per share to a cash offer of 325p per share. The improved offer was in response to an offer from Alchemy Special Opportunities LLP that involved the equity finance company it acquiring a 50 per cent holding and making a cash injection into the company – but not clearing the whole of Countrywide’s outstanding debts of £91m,
Connells pointed out that the Countrywide Board had already admitted that if it did not re-structure its capital there would be a risk that the company could end up in administration. ‘Connells’ offer addresses that need and provides Countrywide with a platform for growth free from external debt’, it said.
‘Connells’ primary motivation for the offer is to invest in and grow the Countrywide business. Connells believes that significant and sustained investment is required in Countrywide’s technology, network and people to put the business back on a solid footing. Connells intends to maintain and enhance Countrywide’s current service offering and does not anticipate making any material changes to the locations of Countrywide’s branch network’.
Both Countrywide and Alchemy have urged shareholders to take no action until they have assessed the new offer. Countryside said it will evaluate the merits of Connells’ offer in consultation with the company’s major shareholders.
‘Countrywide desperately needs a deliverable solution to its current financial problems and lack of strategic direction’, said Connells group chief executive David Livesey. ’Putting Countrywide back on track requires sustained investment and gritty operational improvement over many years. Connells is offering a clear vision for the future, not yet another turnaround attempt based on wishful thinking and flaky financing. Connells’ cash offer of 325 pence per Countrywide share is the only tangible deal on the table and gives Countrywide shareholders a huge premium over the value of their Countrywide Shares before we announced our interest’.