Hunters Property plans placing to buy Gloucestershire agent for £2.5m

Letting agency Hunters Property is to buy Bristol and Gloucestershire estate agent Besley Hill Franchising for £2.5m, which will be part financed through an equity placing.

The acquisition will be paid for with £2.25m in cash and the remaining £250,000 through a placing of 421,578 shares at price of 59.301p each to Besley Hill, which will also be subject to a 12 month lock-in.

The new shares are expected to be admitted to trade on AIM around 23 March.

Of the £2.25m in cash that will be paid, £1m will be drawn up from the company’s revolving credit facility.

Hunters believes that the acquisition, which will increase the number of branches it operates to 202 but is subject to company receiving proceeds of £1.3m in the share placing, will enhance its footprint in the south west of England and provide a platform to expand in the area.

In the year ended 31 March 2016, Besley Hill generated pre-tax profit of £18,239 on revenue of £914,570 and its net assets amounted to £344,238.

Hunters chief executive Glynis Frew said: "We are pleased to have secured the ongoing commitment of management who have in turn signed up under new franchise agreements with us with their three branches."

Separately, Hunters has proposed a final dividend of 1.30p per share, which the placing and consideration shares will be entitled to receive, subject to shareholder approval at the net meeting in May.

Together with the 60p interim dividend, the aggregate dividend per share for 2016 will be 1.90p, a 27% increase from last year.

Shares in Hunters Property were down 2.36% to 57p at 0816 GMT.