(Alliance News) - Connells Ltd on Monday significantly raised its takeover offer for fellow UK estate agency Countrywide PLC, while dismissing a rival proposal from Alchemy Partners.
Connells announced a firm cash offer for Countrywide at a price of 325 pence per share, which values the London Main Market listing's equity at GBP112.1 million and implies an enterprise value of GBP200.2 million including Countrywide's debt.
Connells said it decided to increase its previous proposed offer price by 30% after discussions with the Countrywide's shareholders last week. It said the cash offer means shareholders would receive "immediate, certain and significant value at a 124% premium" to Countrywide's closing share price of 145.00p on November 6.
Shares in Countrywide were up 23% at 313.00p in London on Monday.
Under the terms of the offer, Connells said Countrywide's lenders will be repaid in full and additional investment will be provided, "giving the business the financial strength to recover from the under-investment of recent years".
Last Wednesday, UK private equity firm Alchemy Special Opportunities LLP offered Countrywide shareholders the opportunity to sell to it 250p per share, coupled with a recapitalisation of the company. Countrywide has yet to accept any firm offers.
Connells said Monday it believes its new offer is significantly more attractive to Countrywide shareholders than the Alchemy Partners proposal, which it said would leave "Countrywide with high levels of debt and significantly less capital", while remaining a listed company.
Further, Connells said its offer is not conditional on clearance from the UK Competition & Markets Authority, saying it believes the combination will not give rise to any competition concerns on any markets in which Connells and Countrywide operate.
In response, Countrywide said Monday it will evaluate the merits of the Connells offer but urged shareholders to take no action in the meantime.
Likewise, Alchemy said Monday it is considering its options, following the announcement by Connells.
By Zoe Wickens; zoewickens@alliancenews.com
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