A proposed merger between estate agents LSL and Countrywide has collapsed after the former revealed that it does not intend to make an offer for Countrywide.
It comes after the two companies confirmed they were in discussions to merge in a deal believed to be worth almost £500m earlier this year.
Shares in LSL plummeted by as much as 19% in early trading this morning (16 March) following the announcement, while Countrywise saw shares slump by almost 50%.
It was previously reported that the two companies were said to be in “serious” discussions of a possible merger which would see the creation of the UK’s largest estate agency group in the UK.
Collectively the two estate agents have a portfolio of over 1,000 outlets including property agents such as Bairstows Eve, Hamptons, Your Move and Reed Rains.
However, Countrywide recently reported losses of £218m for 2018, compared with a £207m loss last year, but attributed the loss to “Brexit uncertainty”.
Additionally, LSL Property Services revealed that pre-tax profits fell by 31% in the full-year ended 31 December 2019.
The parent company of Your Move and Reeds Rains did, however, see a “positive performance” with its group underlying operating profit, which rose 3% to £37m. Group adjusted EBITDA also rose by 25% to £51.9m.
Simon Embley, chairman of the group, said at the time: “The group delivered a highly resilient revenue and underlying operating profit performance in 2019 in the context of challenging residential market conditions and the introduction of the tenant fee ban on 1st June 2019.”