Countrywide defeat puts Hill in trouble

Shareholders in Countrywide rejected a £971m offer yesterday that had been recommended by the estate agent's board, raising questions over the future management of the group.

Although 58 per cent of shareholders who voted backed the offer, led by the chain's chief executive Harry Hill and financed by private equity group 3i, the bid needed 75 per cent support to succeed. A number of Countrywide's leading shareholders had already publicly declared the offer was too low, including Standard Life, US investment manager Artisan Partners, and France's Boussard & Gavaudan Asset Management.

Countrywide's chairman Christopher Sporborg, who had already announced plans to step down, said the board would now look at the position of Mr Hill, who relinquished his position as chief executive during the bid and would have become chairman had it succeeded. 3i had offered 490p in cash per share for Countrywide and its 21.5 per cent in the property website Rightmove, which floated in March. But shareholders decided this undervalued the business.

Euan Stirling of Standard Life said: "We believe it is important for shareholders to look beyond short-term cyclical concerns when faced with an offer for a business." But Peter Gordon, a partner at 3i, said: "It is curious that a number of new shareholders in a relatively brief analysis decided that all the work we had done in that time was wrong."