OnTheMarket CEO Jason Tebb has written to agents urging them to hold onto their shares ahead of the end of their 5-year lock-in period in February.
OnTheMarket has proposed an agent share dealing arrangement it has created for agents who are considering selling their shares on the public market—with a warning that a quick sale may not offer the best value for money.
OTM is offering shareholders the chance to enter a share dealing facility it has put together with Link Group, which will let shareholders make share-trading deals internally in the future. The offer also asserts that the share dealing arrangement will give shareholders a better long-term return than if they sell immediately.
Agents wishing to cash in their shares will be free to do so from next month, but Tebb pointed out OnTheMarket's rise to profitability since launch as one of many reasons for shareholders to stick with OTM beyond the expiration of the lock-in period.
OnTheMarket is in a strong position at the moment. The company has launched a number of new features and services this year, including the first majority agent-owned CRM last month.
Meanwhile, the portal's interim results, released in October, showed improved revenues and operating profits. Most importantly, OnTheMarket announced that it had agreed critical renewals with more than 10 agencies whose contracts were due to end in February—with big names including Knight Frank, Spicer Haart and Savills committing themselves to OnTheMarket for the foreseeable future.
One downside this year is that CFO and former acting-CEO Clive Beattie left the business despite a potentially lucrative "golden handcuffs" offer—with OTM yet to name a replacement.
The full statement, sent to shareholders yesterday, is below:
Proposed Agent Share Dealing Arrangements
OnTheMarket plc, the majority agent-owned company which operates the onthemarket.com property portal, announces that yesterday it posted to eligible agent shareholders a letter (and certain other documents) (the “Agent Shareholder Letter”) setting out details of a proposed streamlined mechanism for eligible agent shareholders who entered into five-year lock-in arrangements in respect of their ordinary shares in the capital of the Company (“Ordinary Shares”) (“Entitled Agent Shareholders”) at the time of the Company’s admission to AIM in February 2018 (the “Lock-in Arrangements”) to trade their Ordinary Shares, should they so wish, when those Lock-in Arrangements expire in February 2023.
The proposed arrangements referred to above involve making a Corporate Sponsored Nominee administered by Link Group (“Link”) (the “OTM CSN”) available, which provides a facility for Entitled Agent Shareholders who wish to do so to dematerialise their Ordinary Shares and transfer them electronically into the OTM CSN to facilitate future share trading. In due course, it is intended to provide for Entitled Agent Shareholders and participants in the Company’s management incentive plan who are also subject to the Lock-in Arrangements, via the Company’s brokers, Zeus Capital and Shore Capital, to participate in a process to sell Ordinary Shares in an aggregated and orderly manner, to match share buying and selling demand, which the directors of the Company expect to provide a better outcome for those persons who wish to sell Ordinary Shares and for other stakeholders in the Company. Further information and updates on these arrangements will be provided by the Company, as appropriate, in due course.
The Directors believe that the Company’s position as the agents’ portal, with significant agent ownership, continues to offer strong strategic benefits for agents and is delighted to have agents’ ongoing support as shareholders to ensure that they continue to have a collective voice in the continuing evolution of property search websites. Through agent town halls, OnTheMarket will continue to provide a platform for agent shareholders to influence the future direction of the portal. The Company is committed to continuing to offer products and services that provide valuable leads, additional revenue opportunities and genuine cost savings to agents and the commitment to sustainably fair pricing for listing properties at onthemarket.com remains at the core of OnTheMarket’s proposition. The Directors believe that this, together with the Company’s future business strategy, will allow the business to grow shareholder value in the future. The Agent Shareholder Letter will shortly be available on the Company’s investor website under the section “Shareholder meetings and circulars” at plc.onthemarket.com/investors-shareholders, subject to certain access restrictions.