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Is Countrywide in trouble over sale of commercial arm LSH?

Reports in the commercial property industry publication Property Week suggest there may be difficulties concerning the sale of Countrywide’s commercial operation, LSH.

The publication says it is understood that Countrywide has yet to receive any firm offer for LSH despite putting the agency up for sale almost five months ago. 

“I can rule out an MBO [management buy out] of LSH” a Countrywide spokewoman is quoted as saying. She also ruled out any possibility of seeking a listing for LSH on the London Stock Exchange, saying any such talk was “way off base”. However, she refused to comment on whether the group had failed to attract any firm offers for LSH. “We don’t comment on market rumour or speculation, as you know,” she said.

LSH is one of Britain's oldest and most respected commercial properties names, founded in 1773 but only a part of Countrywide since 2013. Countrywide paid £34.1m in cash for LSH which has 33 offices and 1,400 employees.

Deloitte were believed to have been charged with finding a buyer; at the time, it was believed Countrywide wanted to strike a quick deal over LSH early this year, with the most likely outcome considered to be a sale to private equity rather than to a competitor.

Property Week says the lack of interest could lead to Countrywide putting the sale of LSH on hold or pulling it entirely.

The most recent trading statement from Countrywide - regarded as Britain’s largest estate agency business with little commercial property activity aside from LSH - showed that income for the first quarter of 2017 was £162m.

That’s sharply down from £187m in the same period in 2016 but “in line with our expectations” according to the company.

Countrywide’s share price closed on Friday at 164.0 - slightly up from some recent lows but down by over 50 per cent from a year ago when it was 354.8. In the heady days of March 2014 Countrywide’s share price was 686.5.

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