UK property consultancy Countrywide has revealed it will be pursuing 'for damages and costs' the buyer who pulled out of acquiring its commercial arm, Lambert Smith Hampton (LSH), for an agreed £38 mln (€45 mln).
Last December, the company agreed what it described as the 'non-core' sale of LSH to US entreprenuer John Bengt Moeller, the owner of Great Gobal Holdings, a private commercial real estate investment firm based in New York.
LSH has over 40 offices across the UK, and some 1,700 staff. It is one of Britain's oldest commercial property brokers, originally founded in 1773.
Countrywide said at the time that the cash deal of £38 mln represented a fair value for LSH, representing a multiple of 6x LSH's adjusted EBITDA. The board added that the sale would significantly improve Countrywide's capital structure, and allow the group to materially reduce its net debt.
However, earlier this year Countrywide reported that Moeller was 'indisposed during January' and could not access the funds to continue with the deal.
In its latest annual results, unveiled on 21 May, with Countrywide reporting a return to profitable growth, the firm referenced the stalled deal, saying: 'Following exchange of contracts and shareholder approval, the buyer, Mr John Bengt Moeller, failed to complete the transaction. The group has terminated the sale with Mr Moeller and is pursuing him for damages and costs. Meanwhile, the group is continuing discussions with another interested purchaser that actively expressed an interest in LSH during the delayed completion period.'
The results show that Countrywide's adjusted EBITDA of £24.4 mln for 2019 was up 16% year-on-year, ahead of the board's expectations.
However, LSH income was down 9% to £101.9 mln and its adjusted EBITDA pre-IFRS 16 down by 64% year-on-year to £4.2 mln.
Moving forward, the group said that it was meeting the government's social distancing requirements with a 'phased re-opening for business across all of our operating channels, including physical branches and valuation visits in addition to the continuation of web-chat and telephony contact'.
The firm added: 'We have accelerated the expansion of our virtual viewing offerings, adapting to social distancing measures, and we are offering our customers online mortgage advice. This way of working is resonating well with our colleagues and customers who are appreciative of this multi-channel choice of engagement, providing support and advice whilst allowing everyone to stay safe.'
