LSL managers forced to reapply for jobs following HEAL deal
LSL Property Services’ regional managers have been entered into a selection process alongside managers from Halifax Estate Agencies, which LSL last week agreed to acquire from Lloyds Banking Group for £1.
LSL will acquire all 218 branches and 879 of the 1050 staff employed within the network, which Lloyds acquired as part of its £12.2bn acquisition of HBoS in September 2008.
Regional managers across both businesses are being forced to apply for an undisclosed number of positions within the LSL group.
Speaking exclusively to The Negotiator, Simon Embley (pictured), LSL’s group chief executive, says there are a number of interview panels, each comprising a representative from Lloyds, which will continue to manage HEAL staff until the acquisition completes, plus a representative from LSL’s human resources team and an operations director.
Embley insists the management selection process will be completed within three weeks. David Newnes, managing director of Your Move, one of LSL’s three agency businesses, adds: “We wanted to keep it really short because it’s a period of disruption for our people as well. All our area management has been put at risk of redundancy along with all of theirs, so to have it lingering on for a month or two is just crazy.”
On total staff numbers for the enlarged group, Embley adds: “We’ll be making a number of redundancies, but we won’t know the exact number yet because there’s still three months until the deal completes and we can’t do any restructuring until day one of completion.”
But he adds: “We are going to invest in the business and its people. Agency is a core business for us; it wasn’t for Lloyds. This isn’t a slash and burn business in any way, shape or form.”
As The Negotiator exclusively revealed last week, LSL’s acquisition of HEAL includes a £22.2m premium, which Lloyds will pay LSL to help cover restructuring costs and provide working capital.
Embley says: “It will cover certain liabilities, including property dilapidation, the cost of rebranding the network and other restructuring costs, plus the cost of marketing launches. There will also be a cash flow provision because the pipeline we are inheriting won’t be huge. This will help us generate cash next year.”
The acquisition will see the Halifax agency branches integrated into LSL’s existing agency brands, which in addition to Your Move, includes Reeds Rains and Intercounty, making LSL the second largest estate agency in the UK after Countrywide.
Embley believes the deal, which is scheduled to complete by January 15 2010 – subject to shareholder approval next month – will enhance group earnings by 2011, assuming that there is a modest market recovery.
Confirmation of the deal, which includes an asset management business, comes just two days after the two parties confirmed they were in talks. A statement from Lloyds reveals that its decision to sell HEAL follows an internal strategic review, which concluded that an estate agency operation is no longer integral to its business model. It adds that as part of the transaction, the 121 Halifax banking counters located within the HEAL offices will close early next year.
• See the full interview in this week’s issue of the magazine, out today.