Confirmed: Countrywide admits ‘mega merger’ talks with LSL underway

Countrywide and LSL Property Services have this morning confirmed that talks are underway about a possible mega-merger.

This confirms the speculation yesterday that a lifeline for Countrywide was being thrown.

This morning’s statement by Countrywide hints at a possible outright purchase of CW by LSL and says: “The Board of Countrywide plc notes the recent press speculation regarding Countrywide plc … Countrywide confirms that it is in discussions with LSL Property Services plc regarding a possible all-share combination. 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.”

And in a parallel statement from LSL to its shareholders, that company says: "In view of the recent press speculation regarding Countrywide plc and the announcement by Countrywide, the board of LSL Property Services plc confirms that it is in discussions with Countrywide regarding a possible all-share combination. Discussions between Countrywide and LSL are ongoing. At this stage, there can be no certainty that any offer will ultimately be made for Countrywide. LSL reserves the right to introduce other forms of consideration and/or vary the mix or composition of consideration of any offer. Further announcements will be made in due course as appropriate."

Yesterday we reported a Sky News exclusive on the talks, with much speculation concentrating on the senior management of Countrywide.

Frequent traumas at Countrywide, even since the departure of former chief executive Alison Platt, have focussed on the ability of executive chairman Peter Long, group managing director Paul Creffield and chief financial officer Himanshu Raja.

Since the trio took command of the organisation it has gone through a bloody branch closure programme, an emergency rights issue, a shareholder revolt, two serious compliance breaches with fines totalling £315,000, and recently a stalled sale of the commercial arm - the latter having been described as being vital to the financial wellbeing of the firm as a whole.

Countrywide’s share price, buffeted after a long-term decline of well over 90 per cent, valued the company at just £110m on Friday.

This contrasts with LSL’s chief executive Helen Buck who last week ‘spontaneously’ went on a public relations offensive, issuing a statement boasting of the success of her firm’s branch closure programme announced in February 2019. 

In recent years that programme, combined with other measures, saw an estimated 1,200 jobs go across the LSL activities, including Reeds Rains and Your Move according to Sky’s report.

LSL, although a smaller company than Countrywide in terms of headcount, was valued at £355m on Friday.

Estate Agent Today has asked a panel of leadin g industry figures for their thoughts on the possible merger - you can see that here.