Talks between the country’s two largest listed estate agencies could result in LSL offering for Countrywide. The offers seems most likely to be a shares deal but LSL has not ruled out “other forms of consideration”.
Announcements made by the pair to the London stock exchange this morning follows a speculative story yesterday that the two are planning a £500m merger. This morning, it was confirmed that talks between the two are ongoing but the statements suggest not so much a merger but a take-over by LSL.
The Sky News channel yesterday said that the merger “would underline the pressure on an industry being buffeted by competition from online rivals”.
It said that Countrywide and LSL, whose brands include Your Move, Reeds Rains and Marsh & Parsons, are discussing an all-share deal.
According to Sky News, the discussions were said at the weekend to be “serious although it was unclear how close the two sides are to announcing a transaction”.
The story says that a merger “would inevitably raise the prospect of substantial job cuts from the combined workforce of about 14,000 people”.
A spokesperson for LSL yesterday evening declined to comment. Countrywide did not respond when EYE enquired.
LSL shares have been trading at a three-year high, closing at 341p on Friday after hitting 345p last Wednesday. It has a market capitalisation of £355m.
Countrywide shares also made some gains last week, closing at 340p on Friday, up from 297p at the start of last week. Its market worth is far lower than LSL’s, at £110m.
Both companies have made significant cuts in branches and staff – Countrywide over the last few years and LSL, at its Your Move and Reeds Rains networks, in the last 12 months.
Countrywide confirmed the talks rumours to the London stock exchange this morning.
Its statement said: “The Board of Countrywide plc (the “Board”) notes the recent press speculation regarding Countrywide plc (“Countrywide”). As required under the Code, Countrywide confirms that it is in discussions with LSL Property Services plc (“LSL”) regarding a possible all-share combination.
“Discussions between Countrywide and LSL are ongoing. At this stage, there can be no certainty that any offer will ultimately be made for Countrywide.
“A further announcement will be made when appropriate.”
The statement by LSL is similar but adds: “LSL reserves the right to introduce other forms of consideration and/or vary the mix or composition of consideration of any offer.”
The same statement was added to a new RNS by Countrywide this morning.
https://news.sky.com/story/estate-agents-countrywide-and-lsl-plot-500m-merger-11941530
Comments (20)
A total re-brand was the subject of serious discussion back in the day but for a number of reasons was considered to be a non-starter as many towns Towns and cities back than had 3 separate CWD Brands on the same High Street so that would mean Branch closures/redundancies etc. and in truth it worked pretty well as each Brand back then had their own management team which made for fun and games I can assure you.
CWD Estate Agents has been a trading name in Scotland for many years due to the old Donald Storrie/Nationwide connection giving them no choice but to switch and worked pretty well. Whilst I agree some of the ‘ lesser ‘ brands don’t have the clout they used to it would need a huge goodwill write down on the books to re-brand which they currently could not afford to do and I just don’t think the current set of BODS would be brave enough to do it just look at the Greene & Co. re-brand in London.
That went well.
It’s the central overhead that is the death of mid sized regional and corporate agents……
A referral fee ban would see many collapse.
Countrywide have no corporate identity that is relatable to in the eyes of the public – none……
Doomed like many others
They should have rebranded to Countrywide years ago. At least then they would have that identity. Some of the old brands now have such little street cred due to lack of staff and low stock levels, they may as well not exist anymore! If they had taken a step back and rebranded to one or two brands (Maybe CW for the chimney pots and Hamptons or John D. Wood for the sexy stuff) back in 2011 when they had the chance. Now, having 60 odd brands, some of which compete for the same listing, FS appointment and conveyancing referral, just seems absolutely mad!
The share price seems to be heading one way currently and that is DOWNWARDS seems to be reflecting the confidence from investors in the current BODS being able to actually get any deal over the line in their favour. In truth hard to imagine the last time they put a deal together which didn’t lose them a huge chunk of cash. Take their poorly/hastily put together attempt at an on-line proposition which was a huge loss making disaster and quietly pulled and their recent history of paying eye watering sums in hovering up Lettings businesses from willing sellers only for a good number to wait for their lock out clauses to end and then set up around the corner and take most of the clients back and that doesn’t even include the LSH embarrassment.
Make no mistake this proposed merger is”lender of last resort” for CWD The dreadful BODS have backed themselves into a corner Not only failing to do their due diligence on the buyer of LSH they also foolishly agreed to an amended facility on the strength of it Nowhere else to turn
International rescue
The long suffering CWD shareholders yet another kick in the teeth
Pass the port
LSL will make thousands of Countrywide staff redundant if this deal occurs. LSL will asset strip what’s left of Countrywide and also remove all of their Directors, Heads of, Area Management, etc. This is what LSL do – look at the shambles they made of running the former HEA networks with lots of subsequently closed offices.
This has nothing to do with Onliners and more to do with the total destruction of Countrywide by Platt and her henchmen,a BODs that continue to remain in place having presided over the same and an accountant now running the Estae Agent within LSL.
Shame on you all !!
Im sure Connells,Spicerhaart and many indendant agencies are doing just fine whilst all this mess untangles and will benefit form quality staff wnating to leave a poorly led business.
Perhaps being of a size to exapnd Spiceerhaart should make a counter bid for bits of Countrywide that are duplicated with LSL.
You are absolutely right.
LSL, Connells, Spicerhart and Arun estates are all still trading and although have some problems nowhere near CW, its down to mismanagement.
From the top to branch level there is a disconnect and they have recruited badly. Tried to save money on bold ideas which are ill thought out.
A book could be written on the disasters CW have lurched to over the last 6-7 years. Almost all of it their own doing.
So sad to see a once great Company like CWD seemingly handing out the begging bowl just to stay afloat after the BODS having made one bad decision after the next with some of those very people involved in those decisionsstill there looking to walk away with a bag full of cash if this merger ( take over ) actually goes through. Cannot think there are many more poor decisions these set of BODS can possibly make other than to agree to sell their commercial arm to a guy with no money. Nope tried that already. Shameful.
This is more of a game of monopoly when you’ve passed go and straight to Jail (Countrywide) and sat in the dark damp depths of time for so many years failing to move with the times. Once out they land on allot of hotels and get swallowed up.
mom sorry for those who will lose their jobs but it will help stabilise this beast and in the next few years become a stronger version of itself, a job that successive boards of directors have failed to do so.
I wonder if their aggressive tactics will also be curtailed as they look for service and a longer term strategy?
Agency has changed so much since the heyday of corporates backed by lenders buying chains of independents in the 1980’s and rental books circa 2015. I hope for the frontline staff that this works but LSL only took on the Halifax after their 650 branch network fell apart over a 10 year period. Perhaps the lesson is biggest isn’t always best and don’t be distracted by fads and stick to your core business.
Ahh but they acquired the Freeholds to the HPS buildings – a smart piece of real estate business
Yes that was a fantastic golden hello.
I think it was only about 5 or 6 freehold units with HPS – because mine was one of them – still a nice asset to have (and dispose of)
Desperate measures for desperate times for CWD Interesting to hear in the “excitement “nothing on the subject of J B Moeller and LSH.Is this new proposed merger just a deflection to bury the bad news that CWD are carrying the can of the thick end of a £3.5m abortive fee bill ?
Moeller He is a Director of just the one UK company acc.to Companies House which is in receivership with an outstanding charge ! The company is DDL178 LIMITED
Company number 09346200
You couldn’t make it up DD -Due Diligence or the lack of it by CWD
The proposed LSL/CWD merger means that the group will be saddled with £135m of debt. LSL in better financial shape to carry CWD;s debts Sounds very much to me like a bail out for CWD .Massive duplication of brands in towns where instructions will get lost in translation
Let’s hope CWD long suffering shareholders don’t have another abortive fee bill to face
It would make sense to throw in OTMP into the mix and then they would have their own portal. Perhaps stretching it a bit to include Bricks which would make the group the Sports Direct of estate agency
Not a great surprise if true. Plenty of mergers arise from ‘defensive’ situations, eg. Aberdeen Standard Life vs. passive trackers and Sainsburys Argos vs Amazon & Aldi. Honestly, what other choices does Peter Long have with such a weak balance sheet?
The more interesting question – though of course Chris is right to think of the potential redundancies – is can a LSLWide merger make the multiple brands more competitive? Beware of negative synergy where attempts to apply policy and efficiencies across disparate agency brands causes more harm than good.
LSL took over the hundreds of branches of Halifax Estate Agents back in 2009 – so they have experience at this. LSL made quite a few redundancies in the workforce (myself being one – which at the time was awful – yet in reflection- I wouldn’t be here today in the role I’m if it wasnt that event 11 years ago)
My thoughts have to go out to the staff of Countrywide and I hope if this is true, any uncertainty with their jobs is a short one – and if you are Made redundant- maybe this is the kick up the backside you needed to make the jump to self employed agency with the likes of Keller, eXP, Sean Newman, Benjamin Stevens and the other new self employed models?
….as one door closes in life – another often opens
Good nane drop adverts all over this post for your clients and including yourself Mr Watkin Agency Guru ……. 🙂
This has nothing to do with Onliners and more to do with the total destruction of Countrywide by Platt and her henchmen,a BODs that continue to remain in place having presided over the same and an accountant now running the Estae Agent within LSL.
Shame on you all !!
Im sure Connells,Spicerhaart and many indendant agencies are doing just fine whilst all this mess untangles and will benefit form quality staff wnating to leave a poorly led business.
Perhaps being of a size to exapnd Spiceerhaart should make a counter bid for bits of Countrywide that are duplicated with LSL.
For the record Keller Williams, eXP, Benjamin Stevens are not clients of mine and although I have produced a lot of videos about their self-employed model as I am fascinated by the Self-employed model. None of those have paid me or given me any consideration to produce any of video interviews I have done (in fact – nobody pays me to interview anyone on the WatkinSofa) Sean Newman is a ghostwriting client of mine and I write weekly article about some of the town’s Sean operates from and have done so for a number of years – yet again, he has not paid me or given any consideration to interview about his self-employed model
I will take the name drop for myself though
I wish everyone well – and let’s hope this can be sorted so the everyone, especially Countrywide staff can get in with their lives