Britain’s biggest estate agency group, Countrywide, was thrown into uncertainty today as shareholders rejected the board’s rescue plan and the chairman quit.
Peter Long, a veteran of the travel industry, has left the indebted property giant with immediate effect and former William Hill chief executive Philip Bowcock has stepped into the role of acting CEO in the hope of mending relations with investors.
Long had led a strategic plan that involved raising £90 million in equity from Alchemy Partners but shareholders have spurned the idea.
As a result of investors’ disgruntlement, the owner of Hamptons International and Gascoigne-Pees is now trying to find an alternative way to stabilise its capital structure.
This could include a new deal with Alchemy on better terms, pursuing an £82 million takeover by Connells estate agents, which emerged earlier this month, or raising capital from existing investors.
As well as Long’s immediate departure, managing director Paul Creffield has said he will retire in one year, stepping down as a director in March.
Deputy chairman David Watson will step up as chairman while he looks for a permanent replacement for Long.
Long claimed it had always been his intention to step down when the company found the right person to take the company forward. “Philip is that person. The business is in good hands,” he said.
Connells came in with a takeover approach valuing the group at 250p a share in cash, spurring hopes among investors that they could be saved from Alchemy’s deal. Shares rocketed up 48% on the day to 214.8p.
Under the Alchemy proposal, Long and Creffield would have been replaced, with former Gala Coral and De Vere boss Carl Leaver taking the chairman role.
Earlier this year, LSL Property, owner of Your Move, abandoned a merger plan with Countrywide.
Countrywide has debts of £92 million and has been closing branches despite the property market being healthy thanks to stamp duty reliefs.
Countrywide shareholder Catalist Partners was among those opposing the Alchemy deal, which would have involved a 135p a share proposed share placing resulting in the private equity firm owning a controlling stake in the business.
Catalist has deemed the transaction “unnecessary, ill-judged and dilutive”.
David Livesey, chief executive of Connells, said yesterday that Countrywide had been "repeatedly promised jam tomorrow and it has never been delivered.
"Countrywide needs new ownership, not yet another speculative scheme that is based on hope rather than experience.