Countrywide to spin off life arm

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The Independent Online

Countrywide Assured, the owner of the Bairstow Eves estate agency chain, yesterday unveiled plans to spin off or sell its life assurance arm, which is estimated to be worth around £100m.

The move will free it to concentrate on its estate agency operation - the largest in the UK with more than 875 offices - and its property services business.

Christopher Sporborg, the chairman, said a demerger or sale would "help unlock the underlying value of the two companies" for shareholders and create "more understandable investment propositions". The shares rose 3.75p, or 2.6 per cent, to 149.75p.

Countrywide is holding "advanced discussions" with several British-based businesses about the division and expects offers by the end of the year.

The company, led by group managing director Harry Hill, will then decide whether a sale or demerger offers better value. It expected to complete the process in the spring.

Should it push ahead with a sale, Countrywide said the net proceeds would be returned "in due course" to shareholders. A demerger, meanwhile, would see shareholders paid about £10m in dividends next year - equivalent to around 3p per current Countrywide share.

"Since we entered into the distribution agreement with Friends Provident last year, there has been little logic in the life business being part of the same group as the residential estate agency and professional property services business," Mr Sporborg said.

Countrywide agreed in September last year that any new business would be reassured with Friends Provident. Its life division in effect has been closed to new business since then.

Countrywide is cutting costs at the unit - a plan that is expected to leave the life business with a cost base of about £9m a year.

The company, which also said yesterday that current trading was "in line" with expectations, expects the core business to be renamed Countrywide and the life business to be called Chesnara if it is demerged.

Countrywide said part of its strategy following the sale or demerger would be to develop its remortgage conveyancing business. The company will also look at further acquisitions and consider geographic expansion. It recently opened an office in southern Spain.