Purplebricks has just issued the following statement to the markets.
Announcement regarding possible offer
Purplebricks notes the recent press speculation regarding a possible offer for the Company by Strike Limited (“Strike”). Purplebricks confirms that it has been in discussions with Strike regarding their potential participation in the Formal Sale Process announced on 1 March 2023 (the “Formal Sale Process”).
At the current time Strike is not participating in the Formal Sale Process. As noted in the announcement of 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, nor the terms of any such offer.
Rule 2.6(a) of the Code requires that Strike, by no later than 5.00 p.m. on 12 April 2023, being 28 days following this announcement, either announces a firm intention to make an offer for Purplebricks in accordance with Rule 2.7 of the Code or announces that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline can be extended with the consent of the Takeover Panel in accordance with Rule 2.6(c) of the Code.
This announcement has been made without the consent of Strike.
This really is like the two old drunks at the bar trying to prop each other up.
What are they going to do? Go from losing £20m each to losing £40m? More redundancies? An even bigger dive in customer experience?
Still, killing one old giant is easier than killing two, I suppose.
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Is it a coincidence that the recruitment page on Strike is down right now? https://strike.co.uk/work-at-strike
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They must be on strike
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absolute classic, you can’t write comedy that good
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At the end of January, PIE ran the headline, “Strike to reassess business model as it plans substantial job cuts”.
Strike Limited is exempt from filing full accounts because its revenue is £10.2 or less. Purplebricks last full accounts stated revenues of £70m. The best-case scenario is that Purplebricks turns over seven times what Strike does and it could be considerably more than that.
A business is typically worth between 1-5 times its annual revenue which is a wide-ranging figure. (Elon Musk paid 8.7 times revue to get his hands on Twitter.) It’s a bit like property, it’s only worth what someone wants to pay but I can’t see Strike coming up with £70-£350m.
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Large companies are valued based on their future profits.
The purple bricks share price was below the value of their assets on their balance sheet, which means the market thinks they will never make money.
A buyer won’t have to pay a lot to get their hands on Purplebricks. A 30-40% premium on the current share price.
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Wouldn’t it be surprising if nothing came of this, except Strike getting some publicity.
PB is a mess and the only likely way someone will take it over is if they are paid to do so. Does PB have any cash left and what state is its balance sheet?
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