Countrywide has confirmed it is in talks with LSL Property Services regarding a possible merger which would see the creation of a £470m company.
The estate agent and mortgage broker announced this morning (February 24) it was “in discussions...regarding a possible all-share combination”.
It said talks between Countrywide and LSL were ongoing and at this stage there could be “no certainty” an offer would ultimately be made for Countrywide.
Countrywide has a number of mortgage broker brands alongside its vast estate agents range, while LSL Property Services is the parent company of mortgage brokers TMA Mortgage Club, Primis Mortgage Network, Embrace and Mortgage Gym.
Today’s announcement comes in response to media reports over the weekend that the two property companies were in talks about a £500m merger.
LSL Property Services is the larger of the two companies, with a market cap of £355m, while Countrywide is worth £111m on the London Stock Exchange. The theoretical combined market cap is almost £470m.
Although Countrywide is the larger of the two companies, it would be the junior partner in the deal given its smaller market cap, according to media reports.
Countrywide — whose profits have dwindled over the past few years — saw its share price jump 6 per cent this morning following the announcement, from £3.43 to £3.60.
LSL’s share price has remained flat, up just 0.46 per cent to £3.42 this morning.
Merger and acquisitions has been a prevalent theme in the financial services world over the past few years, with consolidation increasing among asset managers, advice firms and platforms.
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