McGrath Real Estate, the agency of high-profile agent John McGrath, may be denying it is in hot pursuit of its rival LJHooker. But sources are saying it was in fact McGrath’s interest in the high-profile real estate chain that set the ball rolling for the sales process.
McGrath itself has been mulling a sale via an potential initial public offering, as previously flagged by The Australian, and the group could potentially be trying to amass scale for a listing.
Some suggesting the move indicates that the residential real estate market has peaked.
LJHooker placed itself on the block just weeks ago, hiring investment bank Lazard as adviser, in a move some believe may suggest was to test the appetite for the business and to receive a clearer indication on the price that could be achieved.
It is the stakeholders, apparently, who are in favour of the process happening.
The company is headed by Leslie Jansuz Hooker, who shares the same initials of his grandfather, Leslie Joseph who founded the firm.
He is a former private equity gun out of New York with WP Carey and it is understood that PE firms are being targeted in the process, with several approaches made so far.
But in an interesting twist to the process, local real estate rivals, which may include groups like Ray White and Raine and Horne, were not allowed access into the process, sources have said.
Chaired by former Mirvac boss Greg Paramour, LJ Hooker was sold by Suncorp back to a consortium that included Mr Hooker and veteran yachtsman and developer Syd Fischer in 2009 for $67m.
LJHooker and McGrath are two of the largest residential real estate agencies in Australia. LJHooker has 700 franchises in Australia and New Zealand and has a growing platform in Asia, while Mr McGrath founded his chain in 1988, and has about 61 offices in NSW, southeast Queensland and the ACT, most of which are franchises.