In response to shareholder demands, Foxtons has enlisted the guidance of Rothschild, a mergers and acquisitions specialist, to join forces with Deutsche Numis and Singer Capital Market, its existing brokers. Shareholders are pushing for Foxtons to sell the company by the end of the year for a target price of £160 million, based on information from The Sunday Times.
This strategic step follows after the estate agency group’s main shareholder called for the board to actively seek a buyer.
Both Canadian firm Converium Capital, which has a 5.3% stake, and UK’s Milkwood Capital with a 5% stake, are asking Foxtons to pursue a sale. Rhys Summerton of Milkwood Capital expressed the desire to see the “unique asset” sold within the year.
Rothschild has prior experience in the industry, having previously advised on the sale of the Leaders Romans Group to Platinum Equity, a U.S. private equity firm.
Last year in May, Converium Capital recommended a sale to the Foxtons board, estimating that a deal could be worth double the then-current share price.
The investment firm highlighted a pattern of subpar operating results, poor investments, and negative share price movements, noting that shareholders have experienced a loss of over £650 million, or 87%, of their value in an eight and a half year period.
Since its 2013 initial public offering, when Foxtons was valued at £753 million, its market value has plummeted to about £156.67 million today.
The company has continuously reported losses since 2017 until 2021, due to a decrease in housing sales in London. Despite this, its rental sector remained resilient, benefiting from recent rent increases in the city.
A recent financial update revealed a 34% decrease in pre-tax profits to £7.9 million in the year ending December 2023.
A Foxtons representative confirmed that the company’s financial advisory services are handled by Rothschilds, and they work in concert with Deutsche Numis and Singer Capital Markets, the group’s joint corporate brokers.
