Countrywide, the UK estate agency chain that recently rejected a buyout bid led by listed UK group 3i, confirmed this morning that it was in talks with another suitor about a possible deal.
In a regulatory news statement, released in response to weekend speculation, the company said that since the collapse of the 3i bid it had received a “preliminary approach” from an unrelated third party, “which may or may not lead to an offer being made for the entire issued and to be issued share capital of Countrywide.”
Countrywide did not reveal the identity of the new suitor, but a banking source confirmed that Apollo Management, the US private equity group that bought US real estate chain Realogy Corporation for $9 billion last year, was involved.
Credit Suisse, which was one of Apollo’s advisers on the Realogy deal, is also advising on the potential Countrywide bid, the source said. However the bank declined to comment.
Countrywide’s shareholders voted on January 26 to reject the 3i-backed buyout bid after some of the company’s largest shareholders had criticised the 490p-per-share offer as being too low. Their criticism was based partly on Apollo’s Realogy deal, which valued the company at a multiple of 12 times 2006 earnings – substantially more than the 9 times multiple that 3i was offering for Countrywide.
According to a report in the London-based Sunday Times, the Apollo bid could value Countrywide at about £950 million (€1.44 billion; $1.86 billion). At 13:00 GMT today, Countrywide stock was trading up 29 pence at 564 pence, giving the company a market capitalisation of £963 million.
The emergence of another bidder would also allow 3i to rejoin the fray. It is currently banned from making another bid for Countrywide for six months, under UK takeover rules, but this obligation would disappear if a rival bid were submitted. However, 3i has so far insisted that it would not be raising its offer.