Lecram Holdings withdraws takeover bid for Purplebricks

A prominent shareholder of Purplebricks who made a takeover bid for the online brokerage firm every eleven hours last week has withdrawn his offer.

Lecram Holdings – an investment vehicle run by Adam Smith – came out with a 0.5p per share proposal last Friday, valuing the company at around £1.5m.

The move came a week after Purplebricks agreed to be acquired and have its liabilities taken over by rival Strike Ltd for a token price of £1.

Lecram said the alternative offer now gave shareholders the security of cash rather than vague promises from a discredited board of something more sometime in the future.

But on Wednesday, Purplebricks told investors that Lecram had taken his proposal off the table and had no intention of making another offer.

Lecram said in a separate statement: “The reason that led to Lecram’s decision not to proceed is primarily that Purplebricks’ financial condition turned out to be significantly worse than expected.”

Purplebricks continues to recommend the Strike offer, which will be voted on at a general meeting this Friday.

Strike is backed by Carphone Warehouse and TalkTalk founder Sir Charles Dunstone, who is also a partner in Strike’s major shareholder Freston Ventures and Channel 4’s investment arm.

The group’s deal will require Purplebricks to pay up to £5.5m in cash from the balance sheet for expenses and costs, but will essentially wipe out investors.

Paul Pindar, the company’s chairman, who also has a 5 percent stake in Purplebricks, admitted he was “disappointed with the outcome of the financial value.”

He added: “However, there was no other proposal or offering that delivered better returns to shareholders, with the same funding security and speed of delivery needed to provide the stability the company needs.”

Lecram’s Adam Smith is a leading critic of Pindar, having held his position since 2014 after spending more than two decades at outsourcing giant Capita, where he served as general manager and later CEO.

Last November, Smith called on investors to oust Pindar and replace him with former Countrywide boss and Rightmove founder Harry Hill.

In a public letter to shareholdershe said the chairman had presided over a “disastrous” performance at Purplebricks, which saw its share price fall more than 99 per cent from its 2017 peak, while the wider UK property market had remained significantly brisk.

He also noted that during Pindar’s tenure, the company had gone through four chief executives, five chief financial officers “and many other senior executive changes” and has “dwindling” cash resources.

But at the shareholders’ meeting in December, his two resolutions were not passed, with 71.7 percent of the vote against the proposal to fire the chairman.

Founded in 2012, Purplebricks was once worth £1.4bn but has struggled for years with heavy losses due to a failed expansion abroad, declining market share and problems with its rental business.

Purplebricks shares were down 23.8 percent, or 0.15 pence, to 0.48 pence on Wednesday afternoon.