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Countrywide considers new merger proposal as cash deal rejected

Countrywide considers new merger proposal as cash deal rejected
 Credit: Simon Dawson/Bloomberg

Countrywide is considering a revised takeover proposal from a private equity firm after rejecting a cash offer by rival estate agency group Connells.

According to a shareholders’ update today (December 2) the property services group is reviewing an indicative revised proposal from Alchemy for an equity raising.

The proposal includes an approximate £70m recapitalisation of the company to be fully underwritten by Alchemy.

Existing shareholders would be able to sell their shares at 250p each, to be fully funded by Alchemy, or to retain their stake and, if they choose, invest further capital.

The new offer comes after Countrywide shareholders rejected an earlier proposal of a £90m rescue package from the private equity firm last month, after discussions with shareholders indicated “insufficient support”, although the group said shareholders recognised the need for new capital.

Countrywide also announced today that it had unanimously rejected a possible cash offer by Connells. The rival group had made an offer price at 250p per share in cash.

In October Countrywide said it was in “urgent need” of recapitalisation to reduce its net debt and lessen exposure to lenders, adding that the group remained “burdened by excessive debt".

In its update to shareholders today, the group said its board remained “committed” to engaging with all major shareholders to examine all potential options including, but not limited to, the revised proposal from Alchemy and a capital raise from existing shareholders.

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

chloe.cheung@ft.com

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