Purplebricks starts formal sale process with ‘several’ suitors
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Purplebricks kicks off formal sale process with ‘multiple credible’ potential suitors for struggling online brokerage firm
- The recent turnaround plan has more disrupted than stimulated sales
- As a result, full year losses will be greater than previously expected
Purplebricks Group has revealed “several credible” potential candidates for the brokerage firm ahead of launching a formal sale process.
The group launched a strategic review last month amid mounting losses after a turnaround plan focused on investing in key profitable regions ended up costing more than expected and disrupting rather than boosting sales.
Purplebricks told investors on Wednesday it has now received interest from several parties “regarding a potential acquisition of the company or some or all of the group’s business and assets.”
Put up your own sales sign: Purplebricks said it had received interest from several parties
Purplebricks shares jumped 6 percent to 8 pence in response to the update, after losing more than 20 percent last month following the strategic review announcement.
The British broker experienced a turbulent 2022 as it struggled to implement a new business model. This included at least three major management reshuffles and one of the top 10 shareholders – Lecram Holdings – calling for the resignation of Paul Pindar as chairman.
The broker was further hampered by the downturn in the real estate market in recent months, driven by the spike in mortgage rates that scared off buyers and sellers.
The estate agent expects full-year adjusted underlying losses to be between £15m and £20m – larger than the previously expected loss of between £8.8m and £11.3m.
On Wednesday, Purplebricks said: “The group has received several credible expressions of interest that the board intends to pursue in a coordinated manner, in addition to involving a broader range of potentially interested parties, regarding a potential acquisition of the company or some or all of the group’s activities and assets.’
However, it cautioned that “it remains possible” that a formal sale process will not result in an offer, and that Purplebricks could decide that investors “are best served by alternative strategic options… including Purplebricks remaining a publicly traded company.”
Purplebricks said: ‘The company has not currently received any approach from a potential bidder as of the date of this announcement.
“Shareholders are cautioned that this announcement does not represent the firm intent of any party to make an offer…
“The company will inform the market about the timing of the formal sale process in due course.”