Purplebricks, which at one stage was used by thousands of landlords to manage their properties, has announced that its assets and business are to be sold to rival Strike for £1, pending approval by its shareholders.
Any funds remaining in the firm – some £5.5 million – are to be kept back to pay off any liabilities excluded from the deal and to reimburse its shareholders. Purplebricks will continue as an estate agency but under the ownership of Strike.
This announcement marks the end of a process started in February during which Purplebricks senior team have sought to either raise more funding or find a buyer for the estate agency.
It also marks one of the UK’s biggest corporate failsures. Purplebricks at one point claimed to offer both home sellers and landlords a new model of estate agency that offered the same service as a high street firm but for considerably less money.
This proved harder to achieve and despite early success in 2015 to 2018 and a City valuation of some £1.5 billion, the company has faltered including a high-profile scandal in 2021 for failing to lodge deposits on behalf of tenants properly.
Resignation
Today’s announcement reveals that CEO Helena Marston is to resign from the company as will the rest of the board except the CFO Dominique Highfield and it will exit the stock market and cancel all its shares.
“The Directors, taking into account the comprehensive exploration of sale options via the Formal Sale Process, the current trading performance of the Company, the liquidity position of the Company, the near term expiry of a key funding partner relationship and the potential challenges in securing, in the short term, the future ownership of the Group, have unanimously concluded that it is in the best interests of the Company to proceed with Proposed Sale,” the announcement says.
“Accordingly, the Directors intend to unanimously recommend Shareholders to vote in favour of the Resolutions to be proposed at the General Meeting as they have irrevocably undertaken to do in respect of their own beneficial holdings and the shareholdings in which they are interested amounting, in aggregate, to 19,402,865 Ordinary Shares, representing approximately 6.3% of the Company’s issued share capital.”
