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UK's biggest estate agency gambles PS34m on commercial uplift.

COUNTRYWIDE, the UK's biggest estate agency chain, has staked PS34.1m on a resurgence in the commercial property market by snapping up 240-year-old consultancy Lambert Smith Hampton (LSH).

The group is acquiring LSH in a pre-pack administration deal that wipes out debts left over from an ill-fated management buy-out just before the market crashed.

But current shareholders will lose out as the majority of the purchase price will be used to pay off a private equity group which owns the debt.

Countrywide's decision is a vote of confidence in the commercial property sector, which has been badly hit by the downturn.

The group, which currently focuses on residential property, has more than 1,300 branches throughout the UK with brands including Bairstow Eves, Gascoigne-Pees and Hamptons International.

Management sees the purchase of LSH, which recently handled the sale of BBC Television Centre on London for PS200m as an opportunity to cash in on expected growth in the commercial market.

In Wales it is also acting for BBC Wales in identifying a preferred location for a new 140,000 sq ft headquarters in Cardiff.

Executives believe that while it has struggled with debts dating from the time of the PS46 million buy-out in 2007, LSH's operational performance remains robust.

Countrywide said: "There is clear growth potential in the UK commercial property market.

The company also believes that activity in the commercial markets is starting to improve and now is the right time to build on its position in this market."

LSH has a range of leading clients across the banking, finance, transport, telecoms and retail sectors, including more than half of all London borough councils. It recently handled the sale of 800 former railway sites, raising PS300m Accounts for last year showed an operating profit of PS5m on sales of PS64.1m.

Gross assets as of last month were PS17.7m.

Founded in 1773, it is described as one of the largest commercial property consultancies in the UK and Ireland with 26 offices and 861 employees.

Countrywide is acquiring LSH after reaching an agreement with Sankaty, which owned the company's debt, and involves LSH first going into administration.

A source close to the deal admitted shareholders would be hit as the bulk of the PS34.1m purchase price would go to Sankaty.
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Title Annotation:Business
Publication:Western Mail (Cardiff, Wales)
Geographic Code:4EUUK
Date:Sep 27, 2013
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