A City investment fund with interests in several online estate agents has launched a takeover bid for the parent company of easyProperty, which could face closure under the terms of the offer.
The 600 shareholders in eProp, which also owns The Guild of Property Professionals and Fine & Country, are being offered 50p a share by Toscafund.
Late last week the fund bought 1.9 million shares off former eProp boss Robert Ellice which, together with its existing shareholding, gives it a 40% slice of the company. Under City regulations, after passing the 40% threshold, a mandatory offer has now been launched to all the company’s shareholders.
The offer substantially under-values eProp at £17.85 million but its independent directors have unanimously recommended the offer to shareholders as “fair and reasonable”.
Two shareholders and directors of the company Jon Cooke (below, right) and Marcus Whewell (left) are resisting the attempted buyout, claiming they still believe in its long-term potential.
But because they only hold 7.25% of the company’s shares, they are likely to be outvoted by other shareholders who, Toscafund claims, are keen to grab the opportunity to cash-in their shares.
Toscafund, which also owns shares in HouseSimple and Purplebricks, says it believes internal shareholder disagreements over the direction for eProp are “detrimental to eProp shareholders as a whole”.
“Toscafund is supportive of the current executive management of eProp and believes that the Offer provides eProp Shareholders with the opportunity to realise value from their eProp Shares whilst simplifying the shareholder base and providing a more supportive foundation on which to implement a strategy that can deliver value for ongoing stakeholders.”
This includes either trying to find someone to back or even buy easyProperty from eProp, something its board has been attempting to do for some time, or its closure.
In a blog published over the weekend, online agent watcher and Rummage4 CEO Anthony Codling (left) has criticised the deal, saying: “The Guild of Property Professionals and Fine & country are two of the UK’s standard bearers for independent high street estate agents.
“How will their members feel if their standard bearers become owned by a company that appears single minded in its desire to invest in passive intermediaries [i.e. online estate agents], to invest away from the high street rather than into it?
“I am sure that I won’t be alone in suggesting that at first glance it is not entirely clear how this story will end well.”
Read more about EasyProperty.