Countrywide has confirmed it is in merger talks with LSL Property Services and mooting a possible all-share deal.
The announcement follows reports from Sky News that the two agents are discussing a £500m merger to become the UK’s biggest estate agency group, which could result in “substantial job cuts” to its combined workforce of 14,000 people.
The all-share deal would unite Countrywide’s brands, including Hamptons International and Bairstow Eves, with LSL’s Marsh & Parsons and Your Move.
A statement issued by the parties said: “Discussions between Countrywide and LSL are ongoing. At this stage there can be no certainty that any offer will ultimately be made for Countrywide.
“A further announcement will be made when appropriate.”
Under market rules, LSL and Countrywide must announce whether or not they both will make firm offers for the other by 23 March.
Countrywide was founded in 1986 and now owns more than 60 high street estate agency brands. LSL was created following a management buyout of Your Move and E.surv from Aviva in 2004. It also owns Reeds Rains and Mortgage Alliance.
In its interim report last June, Countrywide confirmed that net debt had spiralled to £194.3m as it fell to a half-year loss of £37.7m, although that was an improvement on the previous year’s £206.4m first-half loss. Late last year Countrywide announced a £38m deal to sell its commercial property business, Lambert Smith Hampton, to a Monaco-based investor. However, the sale has yet to complete.
LSL, valued at just over £350m, last month told investors that profits for 2019 would be “slightly ahead” of City expectations.
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