Belvoir has this morning announced that it has approached the Property Franchise Group regarding a possible merger.
But Ian Wilson, CEO of TPFG, said while it had been “dressed up as a merger, it is a takeover bid”.
He told EYE: “It is completely unacceptable.”
The Belvoir board said it is “disappointed that the TPFG board have declined to enter into a dialogue, not least because they had previously indicated a willingness to engage with Belvoir in this regard and also given the strategic rationale for the possible merger offer”.
The Belvoir statement, made at 9.45 am, says that the £33.7m merger would involve TPFG’s shareholders receiving a combination of shares in Belvoir and cash.
It says that Belvoir has a “strong preference” to implement the merger, which it says would be in the best long-term interests of both companies and their respective holders.
The two franchise firms have been close competitors.
TPFG’s brands include Martin & Co, Ellis & Co, C J Hole, EweMove, Parkers and Whitegates. Belvoir’s group includes Newton Fallowell, Northwood, Goodchilds and Belvoir itself.
A merger would create a new super group of 683 offices.
Belvoir proposes a management structure with Mike Goddard, chairman of Belvoir, being chairman of the new enlarged group, with Belvoir chief executive Dorian Consalves as CEO.
Richard Martin, chairman of TPFG, would be “offered the role of non-executive deputy chairman”.
Of Wilson, there is no mention in the proposed management line-up.
Wilson told EYE this morning: “We received the offer on 4th October, on 6th our board considered it and on the 9th we wrote to them rejecting it. So it is quite odd they have chosen to publish this now.
“Our chairman owns 44% of the company and I own 6% so that is 50% of the company that we own between us: if we don’t want to accept the offer, that’s it.
“One of our objections is that it would have taken the combined group debt to £13.5m, denting our EBITDA and the City would not like that.
“Our other strong objection is that we have a more stable management team and lower levels of debt than Belvoir.
“We regard this as a hostile takeover bid, which is completely unacceptable and opportunistic, based on a short-term blip when EweMove under-performed in the first part of this year.
“As I say, it is completely unacceptable.”
This morning, just before noon, TPFG issued a statement to the London Stock Market saying that a merger would not be in the best interests of its shareholders. It said it will make a further announcement.