Belvoir Lettings PLC (LON:BLV) has received a boost for its offer to merge with The Property Franchise Group (LON:TPFG) with three fund managers suggesting talks.
Amati Global Investors, Livingbridge and Hargreave Hale, which speak for owners of 12.31% of TPFG, said they support in principle the two firms engaging in discussions around the possible merger offer.
READ: Belvoir Lettings delighted with performance of Northwood subsidiary
Lettings agent Belvoir made a cash and share approach to TPFG in October worth 130.5p per share or £33.7mln in total.
TPFG’s board rejected the offer and has refused even to talk about a deal.
In its latest statement at the start of the month, Belvoir said it was disappointed with the stance of the TPFG board and urged the directors to consider the merits of a deal.
The combination would create a UK property franchise group with some 683 outlets and 108,000 tenanted managed properties and cement a more robust market position for the enlarged group.
Belvoir needs board support as the TPFG’s directors speak for 49.3% of the shares.
READ: Belvoir Lettings confident it can buck the property trend
In their response, they indicated the current terms will see too much of the enlarged company ceded to Belvoir and load it with too much debt.
Belvoir has indicated it can adjust the equity element of the deal to increase the TPFG element, while it has set up a new revolving credit facility.
Shares in Belvoir rose 2% to 105.3p, while TPFG was little changed at 137p.