Foxtons could sell to Dexters for £300m

A shareholder of Foxtons believes the agency could be worth £300m if sold today – substantially above its existing market capitalisation but still far short of its heyday a decade ago.

One of the possible buyers would be rival London agency giant, Dexters; another would be Platinum Equity, the US owner of the Leaders Romans Group.

In an article over the weekend in the Sunday Times, Michael Rapps – managing partner at Converium Capital, which owns six per cent of Foxtons, says: “They’\ve cleaned up all the mistake of the past and are in a good position”.

He was referring to the strategy to expand Foxtons initiated by recently-appointed chief executive Guy Gittins, correcting what were seen as shortcomings of his predecessor, Nic Budden.

Gittens is quoted in the piece as having said of Budden: “The once unbeatable sales culture had just been dissipated and diluted and turned off – so much that we’re really just become another grey estate agent on the high street.”

Gittens also suggested it took too long for Foxtons to realise that a growth strategy had to include taking over small independent lettings agencies – rentals now account for around 70% of the company’s revenue.

In recent days Foxtons has hired merger and acquisition bankers from NM Rothschild as advisers, as some shareholders – including Converium Capital – push for the agency to be sold.

If the £300m is an accurate estimate of its sale value now, it is some way below its market capitalisation of 2014 when it was worth some £1.1 billion.

Not all shareholders are convinced of the wisdom of an imminent sale. 

Veteran agent Robin Paterson, now of investment company Catalist Partners, tells The Sunday Times: “We believe that the business could grow organically, but it would also need to do some big acquisitions. If the business was sold today you’re not going to get the premium it would probably be looking for.”

You can see the full Sunday Times article here, although for some readers it may be behind a paywall.