The private equity company which wants to take control of Countrywide has issued a statement saying it now has the support of almost 45 per cent of shareholders.
And it is insisting it is the only option for a company with its shareholders divided between those who want to cash in, and those who want to see the company flourish and not be sold.
The statement this afternoon by Alchemy Partners - an existing shareholder in Countrywide - pours cold water on a rival proposal by estate agency group Connells and says: “Alchemy holds or has secured written statements of support for the Proposal, in the form of letters of intent, from shareholders holding 14,700,048 Countrywide shares, representing 44.8 per cent. of Countrywide's current issued share capital on 3 December 2020.”
After years of financial and managerial disarray, Countrywide currently has three options.
1. An £82m bid from Connells which Countrywide’s board has rejected, but which may be improved in the next few days;
2. A proposal from Alchemy Partners injecting £70m into Countrywide and eventually taking a controlling stake of at least 50 per cent, with some unhappy Countrywide shareholders able to sell their stake; or…
3. For the existing Countrywide structure to continue and raise funds from a separate party.
Alchemy says the Connells proposal to buy out shareholders at 250p per share “offers no opportunity for Countrywide shareholders to remain invested in the Company and participate in the upside Alchemy believes exists to turnaround the Countrywide business.”
In any case, Alchemy claims “there is a high likelihood that the Connells Indicative Offer will be closely scrutinised by the Competition and Markets Authority in view of the overlap of the estate agency and surveying businesses and there is significant risk of prolonged delay and potential for the combination to be blocked, or for substantial divestments to be required in order to avoid that outcome.”
And the statement goes on to say: "Alchemy understands that Countrywide's shareholders are divided between those with a firmly held desire to remain a shareholder and are opposed to a sale, and those who wish to accept an opportunity to realise their holdings. The Proposal represents the only way these divergent objectives can be achieved."
Alchemy’s plans include a £35m share issue to Alchemy and a £35m share issue via open offer. Countrywide shareholders would be given the option to sell their shares at a higher price of 250p each, but with certain major investors committing not to sell out.
The private equity firm also wants to revised an existing agreement with Countrywide's lenders so that £30m, rather than £50m, of an existing loan facility is repaid.
The battle for Countrywide continues apace; if Connells is to improve its original (and now rejected) offer to counter Alchemy, it must present it to Countrywide's board by 5pm on Monday.