Troubled online estate agent PurpleBricks, once worth £1.4 billion, is to be sold to rival Strike for £1.
PurpleBricks put itself up for sale in February, with CEO Helen Martson saying that the estate agent’s upside potential was “not reflected in our market valuation”. At the time, its market cap was £30 million.
It sped up the sale process last week despite a lack of interest at the board’s intended price, after warning it could run out of cash if it wasn’t sold soon.
Now, the estate agent has been sold to Charles Dunstone’s Strike, which will assume “substantially all” of PurpleBricks’ liabilities.
PurleBricks expects to be left with £2 million after the sale, to be given back to its shareholders.
Chairman Paul Pindar said he was ‘disappointed’ at the lack of value offered, but that there was no alternative but to accept the deal.
“I am disappointed with the financial value outcome, both as a 5% Shareholder myself and for shareholders who have supported the company under my and the board’s stewardship,” he said.
“However, there was no other proposal or offer which provided a better return for shareholders, with the same certainty of funding and speed of delivery necessary to provide the stability the company needs.
Shares are down 41.6% to 0.77p.
Dunstone said he is still confident in the business model of online estate agents.
“We remain committed to the online estate agency model, which offers customers a much better experience at a far lower cost,” he said. “This is a positive outcome for anyone looking to sell their home and save money doing so.
“Purplebricks has dramatically changed the industry by driving down the cost of estate agency and we aim to combine its significant brand recognition with an even more disruptive business model.
“In bringing together the two brands, we will supercharge Strike’s mission to democratise house selling by empowering customers to have more control over a process that has barely changed for 200 years.”
