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November 2009

LSL top 550-office mark as they buy Halifax EA for £1

City correspondent

LSL Property Services is overtaking Connells to become the country’s second largest estate agency chain, following its bargain basement deal to buy Halifax Estate Agents.

Lloyds Banking Group, which inherited the Halifax Estate agency when it acquired the Halifax, agreed a price of only £1.

Lloyds said HEA had been “loss making for some time” and the sale “followed a strategic review”.

The deal brings LSL an extra 218 offices, of which 93 are franchised. They will be integrated with LSL’s network — already over 350 — once the deal is completed in January 2010 and will be rebranded as Your Move, Reeds Rains and InterCounty, depending on where they are located.

There is some branch overlap but the acquisition will take LSL into some new territory such as Wales, Northern Ireland and the South Coast. LSL will also benefit from the HEA asset management, lettings and conveyancing businesses.

About 1,000 HEA staff will move to LSL, including 130 mortgage consultants. However, Halifax will be closing its bank branch counters which are located in 121 HEA branches and this will lead to the loss of 460 full-time jobs.

Roger Matthews, LSL chairman said: “This is a significant opportunity for LSL to acquire a high quality branch network, an established asset management business and pipeline of sales, on favourable commercial terms at a low point in the economic cycle.”

He added that LSL’s business “had exceeded expectations” since the half year results were announced in August.

City reaction was to mark up LSL shares a further five per cent to 315p, a 12-month high. However, the losses made by HEA are likely to be a drag on LSL’s profits next year, even though the purchase price was next to nothing.

See Mike Goodman's City column >>