Alchemy has issued a new statement following its failed attempt to acquire Countrywide.
Alchemy Partners had secured the support of almost 45% of Countrywide’s shareholders for its proposed offer for the company last month.
The private equity firm confirmed its proposed offering of 250p for each of the estate agency company’s shares and a £70m capital raising that would have enabled other shareholders to keep stakes in the company.
Alchemy secured letters of intent from shareholders holding a total of 44.8% of Countrywide’s share capital.
Those supporting the proposal included Oaktree Capital, which has an 18.2% stake, and Hosking Partners, which owns 15.6%.
Alchemy said under its proposal Countrywide’s existing shareholders would be able to sell their shares at 250p a share to Alchemy.
It would also have included a recapitalisation of £70m fully underwritten by Alchemy. This would have comprised a placing of approximately 15.6m shares to Alchemy at 225p each, generating gross proceeds of £35m, and an open offer of 35m shares at 100p each.
Shareholders other than Alchemy would be permitted to make excess applications once Alchemy had achieved a 50.1% shareholding.
Under Alchemy’s proposal Countrywide would have kept a standard listing on the London Stock Exchange unless at least 75% of shareholders voted otherwise.
Despite the support Alchemy secured from a number of shareholders, it was simply not enough to get a deal agreed.
Last week, Countrywide and Connells announced that they had reached agreement on the terms of a recommended cash offer by Connells for the group.
“As a result of notifications received and the irrevocable undertakings obtained by Connells, the Letters of Intent received from the Relevant Shareholders are no longer valid,” Alchemey said in a statement.
You can read the full statement from Alchemy Partners below:
‘On 4 December 2020, Alchemy announced its proposal for the support of Countrywide plc (“Countrywide”), confirming the announcement made by Countrywide on 2 December 2020. The Proposal involved a possible cash offer at 250p per share for the entire issued and to be issued share capital of Countrywide, in combination with a firm placing and an open offer.
‘Alchemy noted that it had received written statements of support for the Proposal, in the form of letters of intent dated 4 December 2020 (the “Letters of Intent”), from: (i) OCM Luxembourg Castle Holdings S.à r.l.; (ii) OCM Luxembourg EPF III Castle Holdings S.à r.l.; (iii) Hosking Partners LLP; (iv) Jeremy John Hosking; and (v) Brandes International Partners L.P. (the “Relevant Shareholders”). The Letters of Intent were in respect of, in aggregate, 13,859,317 Countrywide shares (representing, in aggregate, approximately 42.2 per cent. of the ordinary share capital of Countrywide on 3 December 2020).
‘Subsequently, on 31 December 2020, Countrywide and Connells Limited (“Connells”) announced that they have reached agreement on the terms of a recommended cash offer by Connells for Countrywide, to be implemented by way of a scheme of arrangement (the “Scheme”). Connells received irrevocable undertakings to vote, procure votes or issue instructions to vote in favour of the Scheme from (amongst others): (i) OCM Luxembourg Castle Holdings S.à r.l.; (ii) OCM Luxembourg EPF III Castle Holdings S.à r.l.; (iii) Hosking Partners LLP; and (iv) Jeremy John Hosking.
‘As a result of notifications received and the irrevocable undertakings obtained by Connells, the Letters of Intent received from the Relevant Shareholders (other than Brandes International Partners L.P.) are no longer valid. Accordingly, Alchemy currently holds a Letter of Intent from Brandes International Partners L.P. in respect of 1,995,924 Countrywide shares, representing approximately 6.1 per cent. of the ordinary share capital of Countrywide in issue on 5 January 2021.’