Countrywide fights back as share price rises over 6% in a day

Countrywide’s share price defied the expectations of some analysts and rose over six per cent yesterday with the company moving from an opening of 13.5p to a close of 14.36p.

This was a rise of 6.4 per cent and almost completely recovered Tuesday’s fall of 6.8 per cent, which occured when the City appeared unimpressed with the fact that only just over two thirds of the heavily-discounted shares Countrywide offered to the public as part of its rescue deal had been snapped up. 

Countrywide had made 285.6m shares valued at 10p each available for the public; just 206.6m were purchased. 

Although yesteerday's share price rise was not seen as a firm endorsement of the rescue package - the remaining unsold shares are likely to be distributed to the company large-scale institutional investors, led by Oaktree Capital Management - the movement was greeted with relief by management at Countrywide, one insider told EAT.

The final hurdle for Countrywide remains its general meeting on Tuesday, the day after the Bank Holiday, where shareholders are expected to endorse the package - large institutional investors have already indicated they will back the deal.

When Countrywide gets its £140m additional funding - its Capital Refinancing Plan - it will be used to reduce its current debts by about 60 per cent, mostly through clearing much of its loan interest payments.

On Monday the agency announced it was dropping controversial plans to give its three most senior executives an incentives package which could have seen them receive a total of over £20m.