BNP Paribas closes in on Strutt & Parker acquisition

BNP Paribas is carrying out due diligence on its potential buyout of Strutt & Parker as a deal to unite the two firms edges toward a conclusion, Property Week can reveal.

It is understood that negotiations around the intricacies of the deal, such as terms for staff lock-ins, have been agreed upon by both parties.

Under the terms of the deal, it is believed that both the commercial and residential arms of Strutt & Parker will be merged with the bank’s property advisory subsidiary BNP Paribas Real Estate (BNP PRE).

However, Strutt & Parker’s 60 regional estate agent offices across England and Scotland may not be included in the deal.

The transaction would give BNP PRE access to the prime central London residential market, which despite having been hit by falling sales in the past year following changes to stamp duty is still seen as a lucrative revenue earner.

Rumours

Shortly after rumours of a potential sale first surfaced early last year, Strutt & Parker appointed boutique investment bank Evercore, reportedly to review the business and help source funds for expansion.

Speculation resurfaced after Strutts senior partner Andy Martin announced in February he was stepping down this year after almost eight years in the role.

It is believed that the firm, which dates back to 1885 and is owned by its 53 equity partners, has had discussions with a number of potential bidders, including Bidwells and CBRE.

In its most recent results, the group reported that its pre-tax profit fell 35% to £18.3m in the year to 30 April 2016. Revenues also fell 3.2% from £111.3m to £107.7m.

The figures were in part due to a sharp slowdown in activity in the prime London residential market. Prices for prime London homes fell 4.8% last year and in the most expensive areas, they are now down 13.2% on their 2014 peak, according to the latest Savills data.

BNP PRE generated revenues totalling more than €700m (£590m) last year. The UK is reportedly its third-biggest market after France and Germany, generating 12% of total revenues.

BNP PRE and Strutt & Parker both declined to comment.

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