At the risk of being shot down in flames in the comments below I’m going to make a prediction. And it’s a bold one.
Whilst the estate agency industry has been distracted by the slow-motion demise of Countrywide and its related antics over the past few weeks together with the excitement of the rise of Boomin, I think something else has been going on under our noses – the proposed merging of the three biggest estate agency groups in the UK.
Now you’ve read that line again to make sure I said what you think I said, yes, I wager that the much-publicised acquisition of Countrywide by Connells will go ahead but, to coin an old phrase, there’s actually going to be three people in that relationship. The additional participant in the property industry’s largest ever menage-a-trois is, I predict, none other than LSL.
This new ‘Super Power’ combines the best of all three businesses:
- The best management team in the industry – Connells top team would run the lot
- Connells have declared their intention to expand this week
- A resulting branch reach that would allow the combined entity to dominate nationally as no other agency has ever done
- Mass brand consolidation into a handful of names. A big name on every high street rather than the current, fragmented picture
- Three big budgets promoting fewer brands – a Marketing Director’s dream
- Huge leverage with premises landlords – the rents on 1500 or so offices would suddenly be forced much cheaper, Mike Ashley style
- FS, conveyancing and survey dominance via LSL across the group
- Lettings and management strength across the network, perhaps the one thing that Countrywide do very well
- The choice of whether to be publicly listed as LSL and Countrywide are. Or to be a private company as Connells are, well away from scrutiny
- Massive back-office economy of scale – HR, business services, head office, marketing etc
- The City will love this deal. Watch the share price of Countrywide and LSL rise if my reckoning is confirmed
If this scenario scares you as a competitor, then I’m afraid it becomes the absolute right thing for Connells Countrywide LSL (let’s call it CCL) to do. Doesn’t it?
The proof will be if LSL are forced to confirm or deny that conversations are taking place. As a public company they would have to then declare their position to the Stock Exchange.
As for those that wonder whether the Competition and Markets Authority may scupper such a liaison, well, the combined might of CCL would still only represent about a 15% market share of UK property sales – well under the 40% threshold that would trigger concerns of them having a dominant market position.
Ridiculous? I don’t think so and I say it’s more likely to happen than not and I hear whispers of certain pieces being moved around the chess board in readiness already.
Please forgive the cliché – but watch this space.
Josh Rayner is the CEO at Rayner Personnel.
I do wonder what the property industry websites will write about if/when Countrywide go private off the stock market in 2021
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
It would have to be Connells running the estate agent side as the other two could not organise a wedding reception during lockdown.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Both Hoskings & Paterson owning 30%+ of CWD prefer not to sell
Revenue in H2 a bookie’s certainty to exceed expectations by a country mile despite the best efforts of the undynamic duo to derail the train.
They are seeking a change in management + a modest capital injection sufficient to put in place some medium term financing.
A route likely to find support from many small shareholders.
The outcome here far from certain
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Somebody better give the Competition and Markets Authority a nudge and wake them up……
Last time I checked they were working from home in the spare bedroom.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I’m sure someone will know but I suspect the three combined wouldn’t even exceed 15% market share so I doubt that the CMA will give them a fleeting thought.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
A poorly written piece and very naive. Big isn’t necesarily beautiful and what Rayner describes is exactly the big, immovable, lumbering beast Countrywide was, and still is. An even bigger version won’t solve its problems.
An example of Rayner’s lack of understanding of agency: most agency offices are leased from fairly small landlords as we don’t occupy shopping centres or business parks. There cannot be a nationwide “Mike Ashley style” pushing down of rents.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Actually a bigger company might be the solution – it’s going to take £££ investment to sort CW issues – and there would indeed be plenty of overlap and costs can be cut. Imagine if all those brands were slimmed down to say 5? And then serious wedge put into the marketing?
But/ so many reasons why it wouldn’t happen.
Mr Rayner knows the top bods at some of these companies I imagine – so its either conjecture or insider info – let’s hope not the latter.
As an afterthought – why did PIE not cover Peter Long stepping down………………….?? And analysing why the hell Mr Bowcock wants to get involved?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Bowcock is there to caretake until an outcome is established Let’s face it a relief that Long is no longer going to be involved in any decisions
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
A report focused on Mr Long’s tenure would make very interesting reading but wisely I suspect PIE have decided best to stay clear as the libel laws in this Country are fairly robust.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
You also have to question the role of the Non Exec.Directors here What on earth possessed them to support the Alchemy bid which was never going to garner sufficient support?Yet another shedful of abortive costs.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
As a profitable company with a large lettings business are they using the Governments support money to go on a shopping spree?!
#payitback
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Interesting concept I guess. I have no issue with anyone for raising a few questions not discussed here before.
One thing is for sure the girls and boys at CWD would much rather stay as CWD than be lead by a team of previous competitors-but I guess they are mere Pawns in a bigger game-maybe of big egos-to be bought and sold.
As a shareholder my shares are pretty much worthless now (as are everyone’s else’s if bought more a than year ago or so ago) so personally Id rather flush them down the toilet than sell them off cheap to Connells or anyone else for that matter -which £2.50 has to be- a farcical offer.
Some one like Alchemy surely wouldn’t expect a initial “cheeky” first bid to be accepted would they?
So as Countrywide staff go into the Christmas period knowing that whatever happens consolidation/branch closures and job losses are around the corner (that would go for Connells and LSL staff too) I am just happy to keep my head down and try and get this ****** pipeline through !
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Must be a slow news day when you are letting recruiters write posts on Estate Agency. Perhaps I can get my 3 year old son to write a piece on Brexit for you next week? Surely there is enough going on in our industry for proper articles written by people who have some idea of what is going on, and actually provide value or insight to us all. Stick to posting this rubbish on your personal LinkedIn profiles
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register