Purplebricks starts formal sale process with ‘several’ suitors
Purplebricks kickstarts formal sale process with ‘several credible’ potential suitors for struggling online estate agency
- Recent turnaround plan has disrupted sales more than boosting them
- As a result, losses for the full-year to be bigger than previously expected
Purplebricks Group has revealed ‘several credible’ potential suitors for the estate agency ahead of launching a formal sale process.
The group launched a strategic review last month amid deepening losses, after a turnaround plan focusing investment on key profitable regions ended up costing it more than expected, and disrupted sales instead of boosting them.
Purplebricks told investors on Wednesday it has now received interest from several parties ‘in relation to a potential acquisition of the company or some or all of the group’s business and assets’.
Putting up its own sale sign: Purplebricks said it had received interest from several parties
Purplebricks shares jumped 6 per cent to 8p in response to the update, having shed more than 20 per cent last month upon the announcement of the strategic review.
The British estate agent had a turbulent 2022 as it struggled with implementing a new operating model. This included at least three major management reshuffles and one of its top-10 shareholders – Lecram Holdings – calling for the removal of Paul Pindar as chairman.
The agent has been further hampered by the downturn in the property market in recent months, driven by the spike in mortgage rates putting off buyers and sellers.
The fixed-fee estate agent expects full-year adjusted underlying losses will come in between £15million and £20million – larger than the previously expected loss of between £8.8million and £11.3million.
On Wednesday Purplebricks said: ‘The group has received several credible expressions of interest that the board wish to pursue in a coordinated fashion, alongside engaging with a wider range of potentially interested parties, in relation to a potential acquisition of the company or some or all of the group’s business and assets.’
However, it cautioned that ‘it remains possible’ that a formal sales process will not result in an offer, and Purplebricks could decide investors are ‘best served by alternative strategic options… including by Purplebricks remaining a listed company’.
Purplebricks said: ‘The company is not currently in receipt of an approach from any potential offeror at the date of this announcement.
‘Shareholders are advised that this announcement does not represent a firm intention by any party to make an offer… and there can be no certainty that any offers will be made
‘The company will update the market in due course regarding timings for the formal sale process.’