Mortgages  

Countrywide shareholders reject £90m rescue package

Countrywide shareholders reject £90m rescue package

Countrywide shareholders have rejected a £90m rescue package in a move which has sent the embattled property giant back to the drawing board in search of extra funding. 

Investors rebuffed the proposed multi-million pound capital raise from private equity backer and existing shareholder Alchemy, which was first revealed by Countrywide in October. 

In an update to the market today (November 24) the mortgage broking giant said discussions with its shareholders had indicated "insufficient support" for the Alchemy deal in its current form, but investors did recognise the need for new capital.

In a bid to stabilise its funding Countrywide could now seek to raise capital with Alchemy on new terms, or pursue a capital raise from its existing shareholders. 

The company said it would also continue to consider the indicative approach received from rival estate agency group Connells Limited. 

Earlier this month Countrywide confirmed it was in acquisition talks with Connells at a possible price of 250 pence per share. 

Today's news came as the company's executive chairman Peter Long stepped down from the role and retired as a director of Countrywide, with former William Hill boss Philip Bowcock stepping in as interim chief executive with immediate effect. 

Mr Bowcock is expected to lead the discussions with shareholders about stabilising the company's capital structure and continue on-going discussions with Alchemy and Connells.

Countrywide first announced Mr Long would be stepping down from its helm as part of the initial Alchemy package in October. 

In an update to the market today (November 24) the troubled property giant also announced its group managing director Paul Creffield was set to retire with effect from November 2021.  

In March takeover talks between Countrywide and fellow broking giant LSL Property Services were called off after the latter pulled out of the deal. 

The merger would have seen the creation of a £470m company and whilst no reasons for the LSL's withdrawal were made public it came as markets around the globe slumped amid the coronavirus pandemic. 

rachel.mortimer@ft.com

What do you think about the issues raised by this story? Email us on fa.letters@ft.com to let us know.