Estate agents Countrywide and LSL ‘plot £500m merger’
Countrywide and LSL Property Services are said to be in talks over a £500m merger that would create the largest estate agency group in the UK.
The companies, which are two of Britain’s largest listed estate agents, are in discussions over a potential all-share deal, Sky News reported.
The negotiations are said to be “serious”, although it is not yet clear how soon a deal could be announced.
The Takeover Panel, which regulates mergers and acquisitions, is likely to force the companies to confirm the talks tomorrow morning, according to the report.
A tie-up would bring together a string of Countrywide’s brands, including Bairstow Eves, Hamptons International and Gascoigne-Pees, with LSL divisions such as Your Move and Marsh & Parsons.
But it could also lead to job cuts from the combined workforce of roughly 14,000 people if the two firms looked to avoid duplication and cut costs.
While Countrywide is the larger of the two companies by headcount, it would be the junior partner in any merger. It has a market capitalisation of roughly £111m, compared to LSL’s valuation of almost £360m.
Countrywide’s shares have suffered a torrid period of trading over the last year amid subdued activity in parts of the UK housing market and the emergence of online rivals such as Zoopla and Purple Bricks.
The estate agent, which is chaired by former Royal Mail bigwig Peter Long, last year agreed a £38m sale of its commercial property arm Lambert Smith Hampton.
However, the deal is still yet to be completed after it emerged that the buyer — a Danish property entrepreneur — was struggling to stump up the money. This uncertainty is said to have accelerated Countrywide’s search for a tie-up.
LSL declined to comment. Countrywide has been contacted for comment.