LSL Property and Countrywide in talks on possible tie-up

FILE PHOTO: Houses are seen painted in various colours in a residential street in London, Britain, May 15, 2019. REUTERS/Toby Melville/

(Reuters) - British real estate agent Countrywide CWD.L confirmed that it was in talks with larger rival LSL Property Services LSL.L about a possible all-share combination on Monday.

Shares in Countrywide, which was valued at 111 million pounds at Friday’s closing price, rose after confirmation of the tie-up talks, which were first reported by Sky News on Sunday.

London-listed LSL’s shares were not traded on Monday, Refinitiv Eikon data showed.

LSL, which has a market capitalisation of around 353 million pounds, also confirmed the talks between the two companies, which it said were ongoing. Under British takeover rules, LSL is required to announce a firm intention to make an offer for Countrywide by March 23 or walk away.

Countrywide has been trying to recover from a botched 2015 restructuring that led to four profit warnings and a deeply discounted share issue. A cooling British real estate market as a result of Brexit has compounded its problems.

However, house prices rose at their fastest pace in nearly three years last month, adding to signs of a rebound in consumer sentiment since December’s election lifted some of the uncertainty around Brexit.

Shares in Countrywide, which also competes with Foxtons FOXT.L rose as much as up 9.1% after the news.

Britain's property sector has seen a pick up in deal activity since late last year, with Vistry VTYV.L buying Galliford Try's GFRD.L residential units and mall operator Hammerson HMSO.L exiting its out-of-town retail locations.

Countrywide in February delayed the sale of its Lambert Smith Hampton business to John Bengt Moeller, who had been “indisposed during January”, and “due to logistical difficulties relating to the transfer of the requisite completion monies”.

Reporting by Samantha Machado and Noor Zainab Hussain in Bengaluru; Editing by Maju Samuel and; Alexander Smith