The Agency rebuts rumours of imminent merger with McGrath
The Agency, set up by the McGrath rebels three years ago, has confirmed discussions have taken place with local and offshore real estate agencies for a possible merger.
The Agency did not confirm any of the parties involved.
They also told shareholders this afternoon that there was "sufficient doubt" that any of the discussions may lead to a formal agreement.
The discussions are said to be in "various stages."
The imperative for any merger or takeover acceptance dissipated mid-week when The Agency secured six more months of funding from Macquarie.
The update came at 12.52pm this afternoon after an online report was published in the Australian Financial Review mid-morning suggesting the merger could be with McGrath.
The report said The Agency wasn't interested in a sale of its business, but indicated they may consider a merger.
"If we receive approaches that make strategic sense and provide value for our shareholders, agents and staff, we are duty bound to review them," The Agency managing director Paul Niardone told the AFR.
The AFR article, nor the ASX statement, made any reference to the initial weekend report by The Sunday Telegraph that indicated the The Agency and McGrath could possibly be "contemplating mutual solutions."
Both shares of the listed estate agencies are struggling to their recover from near record lows. The Agency is trading at $0.067 and the debt free McGrath Group see their shares at $0.235.
The Agency's leadership had previously worked at McGrath.
"The Agency and its advisors take an extremely selective and diligent approach to reviewing all potential M&A opportunities and are only focussed on advancing those that make strategic sense and provide value for our shareholders, agents and staff," the company advised its shareholders.
There has been no formal response from McGrath.
The full Agency statement:
The Agency Group Australia (ASX:AU1) (“the Company” or “the Agency”) refers to speculation in the media over the past 24 hours regarding a potential M&A transaction.
While the Agency confirms it has received approaches from local and offshore real estate companies in recent months regarding potential corporate transactions, they are at this time preliminary and confidential in nature. There also exists sufficient doubt as to if any of these discussions may lead to a formal agreement being entered into.
The Agency and its advisors take an extremely selective and diligent approach to reviewing all potential M&A opportunities and are only focussed on advancing those that make strategic sense and provide value for our shareholders, agents and staff.
Since launching The Agency business less than three years ago, the Company has achieved outstanding national growth and operating results and has attracted some of the best agents across Australia. The integration of Top Level Real Estate Pty Ltd into the combined group has been highly successful, and the Company is confident further revenue growth will be achieved and cost synergies realised over the coming financial year.
The Agency has significantly enhanced its balance sheet in recent times and has a strong foundation from which to continue its strong growth, so while any approaches will be evaluated, they are not necessary for its immediate growth plans.
The Agency confirms it is compliant with the Listing Rules and, in particular, Listing Rule 3.1.