In an announcement made on Friday, Countrywide PLC (LON: CWD) have said they will sell their Lambert Smith Hampton Business.
Countrywide is headquartered in Chelmsford, Essex. It operates over 850 estate agents and letting offices across the country.
It is the United Kingdom’s largest property group, including residential property surveying, a collaboration of estate agents, and corporate services
The firm made the announcement, and the deal is expected to be valued at £38 million in cash.
Shares of Countrywide rallied on the announcement by 15.88% and now trade at 5p. 29/11/19 12:52BST.
Countrywide have had a turbulent 2019, as the firm reported a widened loss in March which caused their shares to crash.
However, shareholders seem optimistic on the deal announced on Friday, as shares moved into green.
The UK estate agent also announced a share consolidation on the basis of 1 new share for every 50 existing shares. The reduction in the number of overall issued shares is expected to improve market liquidity by reducing the volatility and spread.
Countrywide will sell Lambert Smith Hampton to John Bengt Moeller, who is chair of Great Global Holdings Ltd, a holding company for several UK and international companies.
Both the sale and share consolidation will be discussed at the upcoming annual general meeting. The verdict is expected to be announced before the year ends.
“The sale of the Lambert Smith Hampton commercial business strengthens the group. Once completed, we believe that the group will be in a more advantageous position in our core residential market. The group remains on course to deliver a full year result in line with the board’s expectations,” said Executive Chair Peter Long.
The sale itself is expected to improve Countrywide’s capital structure, and proceeds from the sale will allow the group to materially reduce its net debt.
In the real estate and property industry, competitors such as Sirius Real Estate (LON: SRE) have seen their shares rise following increased dividend payouts.
Additionally, the property market has been busy as REIT Real Estate Investors plc (LON: RLE) announced it had changed its variable interest rate facility.
Finally, GCP Student Living (LON: DIGS) and Rightmove (LON: RMV) have given updates as the UK property market has been hit by external shocks.
