Connells Limited, a real estate agency, is looking to take over its rival, Countrywide with an £82 million offer.
Countrywide revealed that it is in dire need of capital to reduce its net debt, among other reasons. The company’s board fears a possible risk of ending up in administration if Countrywide opts to go into a short- and medium-term business strategy that will likely not recapitalize the company.
Countrywide has a shareholders meeting planned for later this month. It had looked towards private equity firm, Alchemy, for a counter-agreement against Connells. Alchemy currently holds 2% of Countrywide shares and had proposed a £90m investment in return for a management rehashing. In this agreement, Countrywide would switch out Peter Long with Carl Leaver as Chairman and replace the current CEO, Paul Creffeld.
However, Connells argues that its offer would be less of a risk than the proposed Alchemy offer. Connells agrees that Countrywide needs new management before it can even think to stabilize its business, but the company currently has debts of £91.9 million and has been losing branches left and right. It will need strong support to answer these ever-rising issues.