Strike’s offer to bail out beleaguered rival Purplebricks is thought to have hit the buffers due to limitations in the sales process.

The Neg reported earlier today that Strike could be set to pounce on Purplebricks but a non-disclosure agreement is thought to be preventing Strike from discussing options with would-be backers.

DISCUSSIONS

Purplebricks confirmed that it had been in discussions with Strike regarding the sale but said: “At the current time Strike is not participating in the Formal Sale Process.

“All participants are being required to enter into a non-disclosure agreement (NDA) on terms satisfactory to Purplebricks. Such NDA reflects terms typical for a Formal Sale Process and enables the Formal Sale Process to run in a fair and coordinated manner for the benefit of Purplebricks’ stakeholders.

There can be no certainty as to whether Strike will make an offer for Purplebricks.”

“There can be no certainty as to whether Strike will make an offer for Purplebricks, nor the terms of any such offer.”

Under the terms of the sale Strike will have until 5pm on April 12 to either announce a firm intention to make an offer for Purplebricks or rule itself out.

Strike has been approached for comment.

Purplebricks put its for sale sign up last month following a collapse in instructions and writing off £1.2 million.

DISRUPTION

At the time the online agency said it had suffered “more disruption to the sales field than originally envisaged” resulting in around £1.2 million of one-off exceptional costs being incurred in the first half of this year so far.

There has been little improvement since with one industry insider familiar with the situation pointing out that it may be a well known brand but it is badly tarnished with rapidly reducing cash in the bank.

They told The Neg: “That will be reducing even further as the sale process drags on and more professional services firms are involved.

“There is also the problem of outstanding and as yet unquantified regulatory issues and a management team considered by most to be unsuitable for the task in hand.

REDUCING

“And just look at the other issues. They have a raidly reducing and presumably demotivated sales force; a newly created financial services division that will burn cash for at least 18-24 months; a letting division that is losing landlords; an expensive head office overhead and technology that has proved to be inadequate.

“Good luck to those private investors piling in hoping to make a quick buck. My view is that a ‘fair price’ is probably about 5p a share and that hardly any of the companies that have been suggested over the last month as likely ‘runners and riders’ would touch this pile of poo with a long stick.”