Foxtons calls in Rothschild as pressure to sell mounts

Estate agent Foxtons has hired merger and acquisition bankers from Rothschild amid growing pressure from shareholders to sell itself for £160m by the end of the year. 

The move, first reported by The Times, comes after its largest shareholders have publicly called on the board of the property group to find a buyer. 

Canadian investor Converium Capital, which owns about 5.3 per cent of the business, and UK-based Milkwood Capital, which owns 5 per cent, have both said they want Foxtons to find a buyer for the business.

The boss of Milkwood Capital, a fund that specialises in investing in companies it deems undervalued, said last November the only way to “extract fair value is for the board to carry out a sale process”.

Rhys Summerton, told The Sunday Times: “In 2015, Foxtons was a £1bn company, but the public markets are no longer valuing the good work the management has done recently and the only way to extract fair value is for the board to carry out a sale process.”

In May 2022, Converium Capital also issued a letter to the board of Foxtons suggesting a sale of the business could yield a price up to 200 per cent above its share price. 

“The combination of poor operating performance and poor capital allocation has, unsurprisingly, resulted in poor share price performance,” the firm said at the time. 

“Shareholders have lost more than £650m, or 87 per cent, of their investment over the last eight and a half years.”

At the time of Foxtons’ IPO in September 2013, the company had a market value of £753m. Today the firm has a market capitalization of around £156.67m. 

It has posted losses every year since 2017 and 2021 due to a dwindling number of housing sales in London.

However, its letting business has traded strongly as rents in the capital have risen in recent years. 

A trading update published by the firm in March showed profit before tax slid 34 per cent to £7.9m in the year to December 2023. 

A spokesperson for Foxtons told City A.M: “Foxtons Group has a retained financial adviser. 

“Rothschilds is the group’s financial adviser alongside Deutsche Numis, which is also the group’s joint corporate broker together with Singer Capital Markets.

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