Purplebricks Sold to Rival Agency Strike for Just £1

May 17, 2023
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Purplebricks has agreed to sell its business and assets to online estate agency Strike for just £1, it emerged this afternoon.

The troubled online agency has been up for sale since February when Purplebricks revealed that it was set to lose up to £20m this year.

After an initial approach dating back to March, Purplebricks has now accepted Strike's offer to take on the beleaguered portal's debts.

The nominal transfer of ownership means that Purplebricks' liabilities—up to £33m, including £29m of debt—will be transferred to Strike.

Purplebricks will retain up to £5.5m of its cash reserves to distribute to shareholders, minus transaction costs. Shareholders include Axel Springer (26.5%) and Purplebricks' own directors, all of whom voted in favour of the sale.

CEO Helena Marston will resign from Purplebricks along with a number of her colleague directors, while Strike has already warned Purplebricks employees of imminent layoffs.

Purplebricks Chairman Paul Pindar, who has been repeatedly called to step down from his role, said:

"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. 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."

Purplebricks shares have fallen 98% over the past five years amid in-fighting, a BBC watchdog investigation for misleading advertising, and regular changes in management. Shares fell 40% to less than 1p (0.77p) per share when the sale was announced this morning.

A statement released to shareholders said:

Purplebricks Group plc (AIM: PURP) announces the completion of its Strategic Review, termination of its Formal Sale Process and entry into a conditional agreement to effect the transfer of substantially all of its trading business and assets to Strike (other than certain excluded assets) through its subsidiary Strike Bidco Limited (the “Purchaser”) for a consideration of £1 and the assumption of substantially all of the Company’s liabilities (other than the excluded liabilities) by the Purchaser (the “Proposed Sale”).

The Proposed Sale results in the Company’s cash balance on Completion (up to a maximum of £5.5 million) being retained by the Company with the intention that the net cash proceeds after the deduction of certain costs and expenses to meet the excluded liabilities (the “Net Cash Proceeds”*) are distributed to Shareholders following and subject to completion of (i) the legal formalities around the transfer of assets and (ii) a members’ voluntary liquidation.

The Proposed Sale is expected to deliver a small return to Purplebricks shareholders and preserves the Company’s business and brand for the benefits of its consumer customers, employees, funding partners and other stakeholders.

The sale will be a knife in the hearts of Michael and Kenny Bruce, who have been through a similar experience with the now-defunct Boomin, which went bust in 2022.

Strike is an online agent founded in 2011, winning the Online Agent of the Year award in 2021's UK Estate Agents Awards.

May 17, 2023
Harvey is an experienced property journalist and copywriter. He has written about the property industry since 2015, starting at The Property Franchise Group in the UK, before moving to Spain to work for Spotahome. He has blogged for the private rented sector, ghostwritten for UK property experts and written case studies for franchise owners around the UK. Harvey joined Online Marketplaces as a News Editor in 2022.

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