Major efforts have been made to keep easyProperty afloat by bringing on a third party investor.
It is not known how long these efforts have been going on for. However talks still appear to be ongoing although time is running out for the online agency said to show no sign of becoming profitable.
The revelations are made in a document in which Toscafund is bidding to take over the entire eProp company which includes The Guild of Property Professionals, Fine & Country and easyProperty.
The document says: “Toscafund notes the current efforts being made by the eProp Board to source third party investment in its easyProperty licensing business, one outcome of which may be that eProp does not retain majority economic control over easyProperty.
“Toscafund is entirely supportive of these efforts.
“In the event that the offer is concluded while these discussions are ongoing, then it is Toscafund’s intention that these discussions be continued and, if commercially possible, completed.
“In the event that an acceptable outcome of these discussions cannot be reached in a reasonable timeframe, then Toscafund reserves the right to consider, in conjunction with the executive management, other strategic options for easyProperty, one of which may be its closure.”
The bid offer says that Toscafund supports the strategy of growing both Fine & Country and the Guild.
But of easyProperty, the document suggests that the online estate agency offering has not recently been a good fit with estate agents.
The online/hybrid model has “despite not growing market share, placed additional pressure on fees”.
The document also says that falling transactions are a problem, and that consolidation across the market is expected.
The document, which values eProp at almost £18m, sets out terms for shareholders to sell their stakes at 50p a share.
Toscafund, already the largest shareholder in eProp, would be buying out other owners of the company. It has already bought out the stake of easyProperty founder Robert Ellice.
Toscafund says that there has been a power battle among the main shareholders as to the direction of the business.
It makes clear in its bid document what its own intentions are.
The offer to shareholders says: “Subject to the above comments concerning easyProperty, Toscafund has no intention of reducing headcount within eProp.
“Robert Ellice will also resign from the eProp Board on completion of the offer. Toscafund confirms that it intends to safeguard fully the existing employment and pension rights of all eProp management and employees in accordance with applicable law and to comply with eProp’s pension obligations for existing employees.
“There is no intention to make any material changes to the conditions of employment or the balance of skills and functions of the employees and management of the eProp Group.”
It also makes it clear that Jon Cooke and Marcus Whewell should continue to lead the company as, respectively, CEO and chief operating officer. Toscafund says it notes that both men do not intend to sell their own shares, “preferring to remain as equity owners of the company”.
The timescale for the takeover – should it go ahead – is likely to be short, and shareholders will be invited to vote following publication of eProp’s results for last year, due to be published at the end of this month.
The offer to buy out the other shareholders was, according to the document, “unsolicited”, but has been unanimously recommended by eProp directors.
The bid has been put together by Tosca Acquisition Limited, a new company specifically formed by Toscafund for the purposes of making and implementing the offer.
Toscafund also backs Purplebricks and Housesimple.
At Purplebricks, where it has taken out a 5.6% stake, it may be reassured by main stakeholder Neil Woodford declaring in a post on his website Woodfordfunds that the business can succeed despite the turbulence of founder Michael Bruce’s departure and the closure of its Australian business, with a review of Purplebricks in America.
Woodford said it would support a decision to close in the US and that Purplebricks should concentrate on the UK and Canada .
The post adds: “Whilst the UK property market remains challenging, Purplebricks continues to outperform the market and the company is clearly confident about the future of the business.
“Having established a market-leading position, there remain many opportunities for further profitable growth.”
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