Hunter becomes the hunted: property firm sold to TPFG for £24m
Real estate firm Hunters agreed this morning to a takeover by The Property Franchise Group (TPFG) to create an enlarged franchised estate agent with just over 400 branches.
TPFG is set to acquire Hunters for £24m after the approval of the firm’s founder, chairman and MP Kevin Hollinrake. The acquisition should allow for cost synergies for both the enlarged group and its franchisees.
With a premium of 28 per cent on Hunters’ closing price of 58.5p per share at the beginning of December, the deal boosts the share value to 74.9p, leaving the share capital of Hunters at approximately £25.2m.
TPFG’s Non-Executive Chairman Richard Martin said: “We have reached an agreement with the Hunters Board and major Hunters shareholders on the recommended acquisition of Hunters. We believe that the acquisition represents a compelling opportunity for all shareholders.”
However, the merger will provoke job losses to avoid “duplication of functions” and “operational inefficiencies”, the group said.
The group will conduct a review to determine the number of headcount reductions.
Advantages
Addressing shareholders in a statement this morning, the companies outlined four key advantages to the deal.
Firstly, the enlarged group will benefit from wider geographic reach with more than 400 hundred branches managing around 70,000 tenanted properties.
While selling roughly 20,000 properties annually, both companies said that the merger would grow cost savings by blending company functions.
To capitalise on financial services, the companies aim to create a group of 100 financial advisors, saying in the statement: “To date, neither The Property Franchise Group nor Hunters has been able to fully exploit the significant opportunities that exist in this area.”
The executive directors will maintain their positions in their respective companies but plan to strengthen management teams by swapping key company players to strengthen the merger.
The companies agreed that Hunters chief executive Glynis Frew will join the enlarged Group as executive director. Meanwhile, Hunters executive director Ed Jones will join group as finance director and company secretary.