Could Foxtons, the prominent London real estate firm, be on the market soon?
There’s increasing chatter in the media about Foxtons potentially being sold, with Dexters cited as one of the many interested parties.
Just last week, Foxtons called on merger and acquisition experts from Rothschild to assist its current brokers – Deutsche Numis and Singer Capital Market – in response to shareholder demands to sell the company by the year’s end.
This decision followed a major shareholder’s public urge for the estate agency’s board to secure a buyer.
Converium Capital from Canada, which holds around a 5.3% share, and Milkwood Capital from the UK, owning 5%, are both advocating for Foxtons to seek a sale.
A recent article in The Sunday Times indicated that Dexters, along with Platinum Equity – which owns the Leaders Romans Group in the US – and Emeria, who acquired Chestertons last year, are amongst the potential purchasers of Foxtons.
“The timing is highly sensible for a sale,” remarked Michael Rapps, managing partner at Converium Capital with a 6% stake in Foxtons. “They’ve resolved their previous issues and are well-positioned for the future. Yet, they lack the financial resources that their private equity-backed counterparts have, who are eager to expand their portfolios.”
Rapps and some other investors believe the sale could fetch as much as £300 million, equivalent to 70p to £1 per share.
Not all shareholders are in agreement, however. Some argue that under the leadership of Guy Gittins, who became the CEO in 2022, the company is recovering well and should remain publicly traded to regain its status as a leading figure in the UK’s property market.
Guy Gittins has overseen progress at Foxtons since his appointment, with stock prices climbing over 50%. The 2023 end-of-year results demonstrated a 5% revenue increase to £147.1 million, driven by a 16% upsurge in lettings to £101.2 million, while sales suffered only a 14% drop, outdoing the wider market’s 24% decline. This year’s initial quarter results showed a 9% revenue rise to £35.7 million.
For Gittins, the secret to Foxtons’ success lies in maximizing the potential of his 1,300 employee team across the 58 branches in London and Surrey.
He expresses a strong focus on lettings, aiming for growth in this stable income source, confidently stating that Foxtons now primarily operates as a lettings business and is the UK’s largest in terms of instruction volume.
Gittins has reserved comment on any potential sale.
Opting for a light-hearted diversion, he mentioned seeking out a stylish Mini keyring to discuss with his marketing team. He emphasized reviving a sense of pride among the staff, which he believes will translate into improved outcomes. “We’re just beginning our journey,” he concluded.
