LSL Property Services has abandoned a proposed merger with its rival Countrywide that would have brought together well-known brands such as Hamptons International and Your Move.
In a brief statement to the stock exchange, LSL said it “does not intend to make an offer for Countrywide”, less than a month after the companies confirmed they were in talks about a deal, which at the time would have been a £470m all-share merger.
The amalgamated Countrywide and LSL would have created a company with about 14,000 employees and 1,000 estate agency branches. Shares in Countrywide plunged by 54% to 76p in response to the news that the talks had collapsed, while LSL shares fell 29% to 174p.
Countrywide floated in March 2013 in a buoyant housing market, but has struggled with mounting losses and a heavy debt burden in recent years. It is the UK’s largest listed estate agent group by branches, and sells and rents properties through 60 high street brands including Hamptons International, Bairstow Eves and Gascoigne-Pees.
Confirming the collapse of the talks, Countrywide said it was confident in the strength of the underlying business as an independent company, and had enjoyed a good start to the year. It said: “The company has seen a positive mood swing in public sentiment through the early part of 2020, which we have seen reflected in a strong start in agreed sales, which are ahead of the board’s expectations through February 2020.
“While we have seen some softening in recent days as a result of Covid-19, it is too early to assess that impact.”
Countrywide has more than 850 branches across the UK and employs 9,500 people. It started closing outlets a year ago, and recently announced the £38m sale of its commercial property arm, Lambert Smith Hampton.
LSL owns the estate agency chains Your Move, Reeds Rains and the London brand Marsh & Parsons, and has about 4,200 employees and 360 branches. It shut 124 Your Move and Reeds Rains outlets last year with the loss of 460 jobs.