Portal Wars – OnTheMarket to demutualise and float on stock market
Agents’ Mutual has confirmed that it proposes to form a new company, OnTheMarket plc, to list on the AIM market of the London Stock Exchange – and that it will drop the one other portal rule.
It will seek to offer a minority stake to investors, raising around £50m of new equity capital, which will be used to fund growth and to support a marketing campaign that it hopes will make an impact against Rightmove and Zoopla.
There will also be a new estate agents’ recruitment strategy; existing agent members will no longer have ‘one member, one vote’ but will instead receive ordinary shares reflecting their fees since OTM launched in 2015.
The company has engaged Zeus Capital as adviser and broker. The board is seeking a valuation for the company of between £200m and £250m.
Agents’ Mutual has this morning stated that it has around 2,700 estate and letting agency members, equivalent to around 5,700 branches.
In order for the Initial Public Offering to proceed, members must first vote in favour of converting their existing membership interests in Agents’ Mutual, a company limited by guarantee, into ordinary shares in a new company, OnTheMarket plc.
This vote is expected to be held on 6 September 2017 at a so-called Members Court Meeting.
There will be a similar arrangement for Agents’ Mutual Ltd Loan Notes to be exchanged for OnTheMarket plc Loan Notes which will be convertible into shares on IPO. Together, many Agents’ Mutual Members provided funding totalling £11m for the venture by way of loan note subscriptions.
Board member firms – Savills, Knight Frank, Strutt & Parker, Chestertons, Douglas & Gordon, Glentree Estates, Kinleigh Folkard & Hayward and Spicerhaart Group – have already undertaken to vote in favour of the scheme.
Agents’ Mutual has told the stock exchange this morning: “The rule was an essential element of the company’s entry into a property portals market dominated by two existing large players but has limited its appeal to some agents. The board believes its release at IPO will enable OnTheMarket to attract substantially more agents to list with it.”
Agents’ Mutual CEO Ian Springett said: “This is the beginning of a very exciting new chapter in our development. With the support of thousands of estate and lettings agents, we have rapidly established OnTheMarket.com as the third biggest player in the UK residential property portals market. For consumers and agents alike, we are committed to creating a genuine agent-controlled alternative challenger business and brand to the two leading incumbent portals.
“We believe that by raising capital from new investors we will substantially strengthen our market position. Agents provide the main property listings content and the main revenue sources for property portals.
“Our members’ ownership of shares in the newly listed company will enable them to remain enfranchised, aligned and fully invested in OnTheMarket’s future success.”
Kindly shared by EstateAgentTODAY