US buyout firm Apollo Management has formally launched its effort to buy Countrywide, the UK estate agency chain that recently rejected a buyout bid from 3i, by proposing a £1.01 billion (€1.50 billion; $1.97 billion) offer.
The offer would value each Countrywide share at about 590 pence, consisting of 505 pence in cash for each Countrywide share, plus a distribution of the company’s holding in UK website Rightmove worth 85 pence per share, based on Rightmove’s closing price yesterday.
This is below the 600 pence hoped for by shareholders, but still well above 3i’s original bid, which was worth about 569 pence per share or £978 million. 3i’s bid was rejected by shareholders after a group of activist fund managers fomented opposition to the price on offer.
Apollo has already begun a charm offensive, as it attempts to persuade these dissident shareholders to back its bid. The buyout firm said its proposal was “conditional on receiving indications of support from a number of Countrywide’s significant shareholders, particularly from certain of those shareholders who voted against the offer from [the 3i-led group].” It said it was already in discussions to gain these indications of support, which would have to be “sufficient to assure Apollo of the likely success of any possible offer.”
Credit Suisse, Deutsche Bank and Goldman Sachs are advising Apollo, with the latter two arranging the financing package.
Meanwhile 3i is mulling its options as it decides whether to re-enter the bidding. The listed buyout group has so far insisted it would not increase its offer unless another bidder emerged.
At 11:00 GMT, Countrywide shares were trading down 4 pence at 577.50 pence.