Shares in embattled Countrywide on Monday tumbled 5% on news that it is in all-share merger talks with smaller rival LSL Property Services to create the UK’s largest estate agency business.
Countrywide is behind High Street brands such as Bairstow Eves and Hamptons International, while LSL has businesses such as Marsh & Parsons and Your Move.
The “possible all-share combination” would value the combined groups at around £470 million.
Analysts said Countrywide’s shares fall could have been due to concerns about delays of the company’s previously flagged £38 million sale of its commercial property operation Lambert Smith Hampton. Those sale talks were first announced last November but the company warned of a delay earlier this month.
One analyst said: “The LSH deal will reduce Countrywide’s debts and put it in a stronger negotiating position ahead of this merger with LSL. The share price fall today suggests that might not happen.” However, the would-be buyer of LSH, John Bengt Moeller, today told the Evening Standard the deal would definitely go ahead.
Estate agents are battling competition from online rivals and a weak housing market.
LSL and Countrywide said there can be no certainty that any offer will be made.
Shares in LSL dipped 1.3p to 339.7p. Countrywide plunged 15.2p to 325p.
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