(Sharecast News) – Foxtons shot higher on Monday following a report the estate agent’s board has come under pressure from 10% of its shareholders to sell itself.
According to The Times, investment fund Milkwood Capital, which owns about 4% of Foxtons, is the latest shareholder to demand a sale.
Rhys Summerton, who runs Milkwood Capital, said: “If you look back, in 2015 Foxtons was a £1 billion 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.”
His statement follows pressure from Canadian investor Converium Capital, which has been lobbying for Foxtons to carry out a strategic review over the past 18 months.
Michael Rapps, managing partner at Montreal-based Converium, said: “Chairman Nigel Rich and CEO Guy Gittins have led an impressive turnaround in Foxtons’ business over the last 18 months. Today, as the largest estate agent in London with a significant recurring revenue lettings book, Foxtons is a highly strategic acquisition target that we think would attract multiple bidders.
“And there are major synergies when putting two estate agencies together that could add even more value to Foxtons. We believe a buyer could save more than £10 million of plc and other duplicative costs which represents about 7 percentage points of margin.”
At 1215 GMT, Foxtons shares were up 6.2% at 43p.