Today is the last day Purplebricks is to be listed on the AIM stock market after its sale to rival Strike for £1.
Purplebricks will now be now operating as a private company, after shareholders in the online estate agency voted overwhelmingly earlier this month to sell the company for just £1 to Strike, a competitor backed by the telecoms tycoon Sir Charles Dunstone.
In a vote held on 2 June, 91% of the votes were cast in favour of the deal, which was recommended to investors by the board last month.
Once seen as an innovator in online house sales and rental, with a peak market valuation of £1.3bn, Purplebricks put itself up for sale in February after issuing a string of profit warnings that resulted in its market value falling to £30m.
Last month, the Purplebricks chair, Paul Pindar, said the company had accepted an offer of £1 from Strike, despite being “disappointed with the financial value outcome”.
The shareholders voted to delist the company from London’s junior market and change the company’s corporate name to Bricks Newco plc.
Under the terms of the deal offered by Strike, Purplebricks will use about £5.5m in cash to pay expenses and costs not covered by the buyer, leaving shareholders with about £2m in proceeds from the sale.
One of Purplebricks’ largest shareholders, Lecram Holdings – an investment vehicle run by the activist investor Adam Smith – put forward a rival bid, at 0.5p a share, valuing the company at £1.53m.
Smith said Lecram Holdings’ offer gave shareholders the “certainty of cash now rather than vague promises from a discredited board of something more somewhere down the line”. However, Lecram this week decided not to proceed after it said “the financial condition [of Purplebricks] was found to be significantly worse than expected”.
Smith is a longtime critic of Pindar and his role in Purplebricks’ decline. Last November shareholders voted against a proposal by Smith to oust Pindar and replace him with the Rightmove founder Harry Hill.
Purplebricks’ five biggest shareholders are the German publisher Axel Springer, which holds a 26.5% stake, JNE Partners (11%), Momentum Global Investment Management (7%), Pindar (5%) and Hargreaves Lansdown Asset Management (5%).
Dunstone, a joint major shareholder in Strike, has pledged to bring Strike’s “much more aggressive pricing” to Purplebricks.
Purplebricks was co-founded by the brothers Michael and Kenny Bruce, alongside David Shepherd, in 2012 and received early backing from Neil Woodford, the former star stockpicker. The company floated on Aim in December 2015.
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