(Alliance News) - Countrywide PLC on Thursday said it has agreed to be taken over by peer Connells Ltd in a deal that values the UK estate agency at GBP223.1 million.
Connells will acquire Countrywide for 395 pence per share, reflecting a more than doubled premium to Countrywide's closing price of 145p on November 6, the day before Connells made its first bid.
The latest offer values Countrywide's share capital at GBP134.4 million and implies an enterprise value of GBP223.1 million.
Shares in Countrywide were 12% higher at 389.00 pence early Thursday in London.
In early November, Connells had approached Countrywide with a takeover offer of 250 pence per share.
However, the offer was rejected by Countrywide, and after another offer by private equity firm Alchemy Special Opportunities for the same amount, in addition to a recapitalisation of the company, Connells raised its bid to 325p per share, or an enterprise value of GBP200.2 million in total in early December.
Connells said on Thursday it has received written confirmations of support for the acquisition from Countrywide shareholders in respect of 16.8 million shares, representing 51% of Countrywide's equity.
The acquisition is conditional on gaining at least 75% shareholder approval, regulatory approval from the UK Financial Conduct Authority and the scheme being sanctioned by the High Court of Justice in England & Wales.
Should all conditions be met, the deal is set to be completed in the first quarter of 2021.
"Following a thorough evaluation of options and extensive consultation with the company's major shareholders, we have been encouraged by their recognition of the need to put in place a sustainable capital structure and a willingness to support the company, which is a great business that has been constrained by too much debt," said Countrywide Acting Non-Executive Chair David Watson.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 1.6% at 6,453.81
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Hang Seng: up 0.3% at 27,231.13
Nikkei 225: Tokyo market closed for New Year's Eve
DJIA: closed up 73.89 points, 0.2%, at 30,409.56
S&P 500: closed up 0.1% at 3,732.04
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GBP: up at USD1.3645 (USD1.3593)
EUR: up at USD1.2296 (USD1.2287)
Gold: up at USD1,893.90 per ounce (USD1,885.33)
Oil (Brent): up at USD51.52 a barrel (USD51.30)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
UK Brexit transition period ends at midnight
Germany financial markets closed for New Year's Eve
1230 GMT UK and Ireland financial markets close early for New Year's Eve
0830 EST US unemployment insurance weekly claims report - initial claims
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UK Prime Minister Boris Johnson has said the UK's destiny "now resides firmly in our hands" as his EU trade deal cleared Parliament and entered into law. The EU (Future Relationship) Act received the backing of the Commons and Lords as the government rushed approval through both Houses in a single day. It was announced that the legislation had been granted royal assent at 12.25am on Thursday morning, signing the agreement finally reached between the UK and EU on Christmas Eve into law. The Act paves the way for the deal to take effect at 11pm on Thursday when the current Brexit transition period – during which the UK has continued to follow EU rules – ends.
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US President Donald Trump is cutting short his Florida holiday holiday to return to Washington a day earlier than expected on Thursday, for reasons officials did not explain. The White House announced the abrupt change in the president's schedule late on Wednesday, hours after Republican senator Josh Hawley said he would raise objections next week when Congress meets to affirm President-elect Joe Biden's victory in the November election. The move echoes the futile attempts to remain in power Trump has been pushing following the failure of scores of legal challenges to the election outcome by his campaign, including at the Supreme Court. The schedule change also means Trump will miss the glitzy New Year's Eve party held annually at his private Mar-a-Lago club in Palm Beach. Neither Trump nor the White House explained why he decided to shorten his holiday.
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BROKER RATING CHANGES
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none reported
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COMPANIES - FTSE 100
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Associated British Foods Chief Executive George Weston sold 434,791 shares at GBP22.53 to GBP23.25 per share, worth GBP10.0 million, in series of transactions from Wednesday last week to Tuesday this week, the Primark store owner said Wednesday afternoon.
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Trafigura Group said it has acquired a 10% stake in oil & gas company Vostok Oil from Rosneft Oil, a Russian oil company in which BP holds a 20% stake. Vostok Oil is a project which brings together Rosneft's resources in the Arctic, including the Ermak Neftegaz venture with BP, and links them through the Northern Sea Route to markets in Europe and Asia. The project aims to create an oil-producing region capable of supporting 50 million tonnes a year of exports in phase one and up to 100 million tonnes upon the completion of phase two. The Singaporean trading and logistics business said the acquisition - which was primarily funded by long-term debt financing - provides it with access to a major new onshore oil-producing region in Siberia's Taymyr province comprising the Vankor and Payakha clusters which have around 6 billion tonnes of high-quality crude oil resources.
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COMPANIES - FTSE 250
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FirstGroup reported three property disposals in the US and Canada, for total gross proceeds of USD137 million, as part of its programme to rationalise Greyhound's property portfolio. The largest is the sale of Greyhound's oversized legacy garage and customer terminal facility in the downtown arts district of Los Angeles, California, to a subsidiary of Prologis Inc. The agreement was finalised on Wednesday and FirstGroup said it will receive net USD88 million in cash and will lease back the facility from Prologis for two years. The Los Angeles site had a book value of USD11 million as at September 30. The other two property disposals are of facilities in Denver, Colorado, to be sold for net proceeds of USD37 million, and in Ottawa, Ontario, for net proceeds of USD7 million. In total, the three properties' book value was USD24 million as at September 30, resulting in a total profit on sale for all three transactions of USD100 million, net of leaseback, property tax and selling costs. The cash proceeds from the transactions will be used for general corporate purposes, FirstGroup said.
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COMPANIES - MAIN MARKET AND AIM
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Catalyst Media Group reported a widened loss in its most recently ended financial year amid lower income from associates. The UK-based company, which licenses or exploits rights to television and cinema content, reported a pretax loss of GBP1.1 million for the year to the end of June compared to GBP589,492 loss a year earlier, despite revenue remaining stable at GBP25,000. The loss came after share of profit of equity-accounted associates, net of tax, decreased to GBP125,294 from GBP3.8 million year-on-year. Catalyst Media Group explained that its main asset continues to be the 21% shareholding in Sports Information Services (Holdings). As a result of Covid-19 uncertainties, Sports Information Services has deferred any dividend this financial year but will consider a dividend next financial year. Catalyst Media Group noted that it continues to be cash positive and operated at very low overhead levels.
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Freight management services provider Xpediator said it has agreed to sell EshopWedrop Holdings, a wholly owned subsidiary, to Inert Logistics LLP, the controlling party of whom is Mircea Bandean the current managing director of EshopWedrop. The sale is expected to complete on Thursday. The total consideration payable is GBP300,000 in cash, which will be paid in equal annual instalments over the next three years. Xpediator said the proceeds will be used to continue to grow the core business. The book value of EshopWedrop assets - including capitalised IT expenditure, goodwill and working capital - is GBP700,000, which will result in a net loss on the sale of the business of GBP400,000. "On completion of the sale, the group will benefit from annualised cost savings of GBP350,000," noted Chief Executive Robert Ross.
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COMPANIES - GLOBAL
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AXA said it has signed an agreement to sell its insurance operations in Greece to Italian peer Generali for EUR165 million. The French insurer stated the sale price of its Life & Savings and Property & Casualty businesses represents an implied 12.2 times the price to earnings multiple. AXA added the sale - which is expected to be finalised by the end of the second quarter of 2021 - represents a continuation of the company's simplification strategy.
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Thursday's Shareholder Meetings
Tetragon Financial Group Ltd - AGM
Goldplat PLC - AGM
M&C Saatchi PLC - AGM
Iconic Labs PLC - AGM
Wilmcote Holdings PLC - AGM
KKV Secured Loan Fund Ltd - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
