Shares in property services group Countrywide (CWD) leapt 12% higher to 389p on the last trading day of the year following an agreed increased offer from Connells.
The new offer of 395p in cash is 58% higher than the initial approach on 9 November of 250p and 22% above the second offer of 325p made on 7 December.
Acting non-executive chairman David Watson commented, ‘Following a thorough evaluation of options and extensive consultation with the company's major shareholders, we have been encouraged by their recognition of the need to put in place a sustainable capital structure and a willingness to support the company, which is a great business that has been constrained by too much debt.’
BOARD APPROVAL
The board is recommending shareholders to accept the revised offer which it said, ‘fairly values the opportunities and risks of the business.’ Connells has received written confirmations from shareholders representing 51.03% of Countrywide’s issued capital.
Today’s announcement means that the company has ended discussions with Alchemy Partners which had proposed a fully underwritten equity raise as part of its offer for the company.
The latest offer from Connells will be implemented by a scheme of arrangement rather than a formal takeover and a court hearing will be scheduled at the earliest opportunity to sanction the deal.
Countrywide said it doesn’t believe there will be any competition concerns and therefore the proposed transaction is not dependent on approval from the Competition and Markets Authority (CMA).
The increased cash offer values Countrywide’s equity at approximately £134.4 million and implies an enterprise value of around £223.1 million, which includes net debt.
Connells said that Countrywide would benefit from being part of an enlarged group, backed by the long-term investment and strategic decision making of Connell’s parent Skipton Building Society.
