Agents are now anticipating contact from Zoopla to see if they will be interested in buying discounted shares when the company floats with a proposed valuation of £1.2bn.
Zoopla has yet to publish its prospectus, but this is expected shortly.
Agents will be particularly interested to see the firm’s business projections, including income and yields – especially to see if Zoopla foresees any subscription money being diverted away by the launch of Agents’ Mutual, or even refers to Agents’ Mutual at all.
There could also be a question mark as to how much independent agents will be tempted by the deal – essentially a sale of just 25% of the business – when Zoopla will still be largely controlled by its current backers.
These include the Daily Mail and General Trust, private equity, and the three large corporates, Countrywide, LSL and Connells. None are expected to sell all of their stakes.
Zoopla said it will be allowing member agents to apply for the discounted shares “within the next few weeks and intends to communicate directly with each member on this”.
The UK’s second biggest property portal will float by offering for sale shares put up by its current owners.
These will be sold only to financial institutions such as pension funds, and to the agents and developers who list on Zoopla and who will be able to buy at the discount.
The DMGT and founder Alex Chesterman will be among those selling some of their shares. However, DMGT expects to remain the largest shareholder and it is not known how much of its current 52.6% stake will be sold.
There have been mixed reactions about the Zoopla 20% discounted “loyalty” offer which will enable agents to buy up to £2,500 shares this year per branch and the same again next.
One City analyst said it was a “clever idea” but described it as a sideshow.
Agents seem divided. Some said that it was a highly investable proposition, while others saw it as a blatant attempt to buy off the Agents’ Mutual threat.
Ian Springett, chief executive of Agents’ Mutual which will be launching its as yet un-named portal next January as a wholly-owned agent enterprise, declined to make any comment.
Eye asked Zoopla about the Scottish letting agents who do advertise on Zoopla, but only via a deal with Lettingweb – which has also just announced a sale of some of its shares to member agents.
A spokesperson for Zoopla said: “The member offer is being made available to any advertising member who has a direct commercial relationship with Zoopla Property Group.
“Although there is no direct advertising relationship in place with lettings office members of Lettingweb, many of their members have a ZPG account for their sales office and would be included accordingly.”
Meanwhile, Chesterman said that Zoopla has ambitious plans for the future, with plans to expand into other parts of the property market, such as commercial.
Yesterday, Rightmove shares rose in early trading but sank back later during the day to close at just 3p down.
Comments (11)
So Agents Mutual launch in January and why does everyone feel that they must chose between the two main players. If AM gets this right then both can be kicked……into the long grass.
How about just those outside of London where there is zero Zoopla advertising? This tale is so reminiscent of the Emperor and his new clothes; cynical old me thinks the carpet bombing of London with Bus and taxi advertising is nothing more than Puffer Fishing for the benefit of those in the city and investors. It is more about Zoopla's worth than the Agents.
At Dinner last night I threw the word Zoopla into the conversation, "Zoopla? what's that?" "A property portal like Rightmove" "Sorry you've lost me" now this wasn't some hick from the country but a chap about to sell a detached cottage and a few acres. In his mind there are two local agents who sell that sort of place and he will pay what commission they ask because that is the cost of those agents. He won’t ask them to chop their fees because he knows what he would say if they asked for a discount on his £1500/day service.
There is no doubt Alex Chesterman is a very smart businessman and therefore I view this as the end game where his personal fortune has been the goal all along. If AM is at critical mass as you claim Paul it really does make sense to use the deterrent that has already been acknowledged; the rights to the data and the power that brings. If you think you have to wait till the portal is written and operational to weald that power you are missing the point entirely. There is no point coming off in drips and drabs there has to be a shock punch one Thursday afternoon when suddenly the portal is empty going into the weekend.
I have been doing one of those jobs that didn't need too much thinking about today. Consequently I got to wondering what would happen if all the AM gold members along with various other affinity groups had a little holiday from each of the portals just to see what would happen.
One of the things that came out in conversation this week is that one poster on here has a full and up to date list of all the agents. It didn't take a ruthlessly competitive mind to work out that starting on June 1st every agent could take down their entire stock from Zoopla and see what happens to the estimated value before rushing in to buy at a 20% discount which might actually be 50% or more too much.
Now AM has achieved critical mass I can't see any real need to wait till January to flex their collective muscles, after all what better way of demonstrating the power of AM to those that haven't yet signed than a practical demonstration of their effectiveness. If nothing more it would serve as a solid test of their communication channels and the mettle of its members.
The more I got to think about what was actually happening the more I realised how this is the cheek of all cheek. Flogging shares in a company back to the Agents who are the intrinsic value and goodwill of the site. The only analogy that came close to what is going on here is a bank charging depositors for depositing their cash to enable the bank to lend that cash out ten times over. All a bit mad!
I'm not sure that most Agents Mutual gold members will flex their collective muscles as im sure most will wait until January 2015 but in any case I cancelled my Zoopla membership this morning.
As you say and as I said yesterday on the other Zoopla thread, the share offering is in my view a cheek. I guess I won't be getting the option to sign up to it now anyway 😉
I'm going to buy £2500's worth just so I can shout at the rep a bit louder.
LOL button, wardy!
I like Trevors analogy of agents "Banging nails in their coffins" by backing Zoopla by buying their shares.
Agents are now at the point where they really have to make a decision on which side they will back……
Those who think they can make a quick grand or two out of this share offer must realise that they will paying it back in multiples as Zoopla try to recoup the £millions of pounds in lost revenue from the 1,000s of agency offices that are leaving them…….Either that or they will be shareholders in a company that may start to promote vendor private sales.(as mentioned above)
I say again….If Zoopla didn't fear AM then the equity partners would not suddenly decide to "give away" a huge chunk of their company in free shares…..It really is as simple as that as far as I'm concerned.
The sudden apparent drop in Alex's shares from 10% as reported previously on EAT and the Rich list Paul H mentioned down to 8% reported by Evening standard suggests where this handout is coming from.
Better to get 8% of £100,000,000 than 10 % of a lower figure. I would give all my PIE mates a share of £20million if I was going to nett [sic] £80 million
The Evening Standard who are owned in part by DMGT reported [22-5-14]they [DMGT] intend to sell at least 25%, with CFO Stephen Daintith welcoming {rubbing his hands like Albert Steptoe at} what he described as "a really healthy return"
This has not much to do with any threat by Agents Mutual although that obviously has an effect, the overall financial effect of this incentive is minimal if it cements the notion the operation is worth £1billion. The 20% give away costs the giver nothing and trades on two old fashioned motivators, greed and gullibility.
Poor old Alex is down £20,000,000 it seems he only has an 8% stake so will be a few places lower on the rich list.
I'm hearing that the IPO prospectus has been received by some already with no mention of Agents Mutual at all or how it may affect their business/future share price. If so then they are walking on very shaky ground indeed.
Headline from 11th Nov
'Zoopla's Alex Chesterman joins Octopus Investments to back Uniplaces'
Their promo services shows that their basic package starts from £0 where a landlord can submit their own photo's and a short property description.
Will further funds raised from zoopla share sales go on helping more private landlords bypass agents fees. If agents buy in are they not banging the nails into their own coffins.
Have a look at the below link. There could be better places for agents to place their hard earned funds.
http://www.growthbusiness.co.uk/news-and-market-deals/fundraising-deals/2433667/zooplaand39s-alex-chesterman-joins-octopus-investments-to-back-uniplaces.thtml