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Will Foxtons be put up for sale?
Dexters has been named as one of a number of potential buyers, with media speculation mounting that the London real estate brokerage giant could be put up for sale.
Amid mounting pressure from shareholders to sell by the end of this year, Foxtons last week appointed a Rothschild mergers and acquisitions banker to work with brokerages Deutsche Numis and Singer Capital Markets. Ta.
The move comes after its largest shareholder publicly called on the real estate brokerage group’s board to find a buyer.
Canadian investors Conbellium Capital, which owns about 5.3% of the business, and UK-based Milkwood Capital (5%) have both said they want Foxtons to find a buyer for the business.
A follow-up report from yesterday’s Sunday Times revealed that Dexters, the US owners of Leaders Romans Group, Platinum Equity, and Emelia, the European private equity-owned real estate company that acquired Chestertons last year, have , suggesting it may be one of the companies keen on this acquisition. Buy Foxton.
“We think this is a very logical time for a sale,” said Michael Rapps, managing partner at Conbellium Capital, which owns a 6% stake in Foxtons. “They have brushed aside all the mistakes of the past and are in a good position. But there are a number of agencies that have private equity backing that want to own more and bigger agencies. And Foxtons doesn’t necessarily have the capital necessary to compete with some of these private equity-backed companies.
Mr Rapps and some other shareholders believe Foxtons could be sold for up to £300m, or between 70p and £1 a share.
But opinions are divided. Other big investors believe the company has turned a corner under new chief executive Guy Gittins, appointed in 2022. They claim Foxtons can once again become one of the biggest players in the UK property market, even though it is a listed company.
Foxtons’ financial performance has improved under Guy Gittins’ management since he took over in 2022, with the company’s share price up more than 50% since his appointment. In the final year of 2023, revenue increased by 5% to £147.1m, with rental income accounting for 70% of the total, up 16% to £101.2m. Sales fell 14% to £37.2m, but outpaced the market decline of 24%. In the first quarter of this year, sales rose 9% to £35.7m.
Mr Gittins said the key to Foxtons’ success was making the most of its current 1,300 staff across 58 branches in London and Surrey.
“Rentals are our top priority. We want to grow and focus on this great recurring rental income,” Gittins said. “We have pivoted and are now first and foremost a lettings business. We are the UK’s largest lettings operator by number of orders.”
Mr. Gittins could not be reached for comment on the sale.
“I was looking for a really nice mini keychain. I’ll talk to the marketing team about that,” he added. “I spend a lot of time in the front office talking to staff, and that pride is coming back. If there’s pride there, we’ll have better results. We’re still It’s just the beginning of the journey.”