A consortium led by the Macquarie Group has succeeded in its second bid to acquire ASX-listed online real estate and software business Onthehouse Holdings for $AUD 70 million.
Four months since Macquarie got access to its target’s books, an all-cash deal has finally been agreed with valuation set at 85c a share.
The consortium, which comprises Macquarie-owned PIQ1 and Macquarie Corporate as well as 77 Victoria Street Trust and Sandrift, firms owned by Onthehouse board members Michael and Daniel Dempsey, initially bid 75¢ a share in December last year.
Just prior to this initial approach, Onthehouse had been trading at 58c, with the agreement even representing a 47 per cent premium to the second valuation, however the Onthehouse board rejected the offer saying it "undervalues the company" and would not in shareholders' best interests.
Shortly after, Onthehouse got a share price hike of 73.5¢ which closed at 69¢ before the consortium, which also includes CoreLogic as an equity participant, made its second offer.
Onthehouse proceeded to close out a joint venture deal with industry portal, realestateview.com.au in an effort to revive its beleaguered online business, onthehouse.com.au.
However, at its recent half year results to December 31, the company terminated the joint venture plans and announced a closure of its website which had once again posted a loss.
In March, the Macquarie consortium raised its offer to 85¢ a share for all of Onthehouse's share capital and the company appointed an independent board committee (IBC) excluding Michael and Daniel Dempsey to consider the proposal.
Onthehouse chairman Tony Scotton, who headed the independent committee says the new deal offers a significant premium to shareholders and has therefore been approved unanimously by the board.
"The Consortium’s proposal, if implemented, provides shareholders with an immediate and significant increase in value without the risks inherent in transitioning our console platform to become a cloud, software-as-a-service offering," Scotton says.
"That's something we believe is critical for the platform to retain its strong position in the market.
"The IBC has, therefore, unanimously concluded that it is in the best interests of shareholders to enter into the Scheme Implementation Deed.”
Onthehouse has appointed Lonergan Edwards to provide independent expert opinion whether the Scheme is in the best interests of shareholders and to provide the independent expert’s report.
The Onthehouse share price had struggled since it listed in 2011 at $1 a share and an $81 m valuation. It reached a low of 32.7¢ in late 2011 and has hovered below the $1 mark in the last five years.