Key Purplebricks‘ investor, Axel Springer, a 26.5% shareholder in the company, has withdrawn its representative on the online estate agency’s board.
A stock market update this morning revealed that Ait Voncke, who joined the Purplebricks board in July last year, as a non-executive director, has stepped down from the role.
Following commencement of the strategic review announced by Purplebricks on 17 February 2023, Axel Springer and the company have been considering the regulatory and governance expectations around equality of information between shareholders during an offer period.
After reviewing the position, Axel Springer has concluded that it will not maintain a board representative for the time being.
Accordingly, Voncke has stood down from his position as a director of the company with effect from 6 March 2023, for the time being. Axel Springer retains a contractual right to appoint a representative to the board of Purplebricks at its discretion.
Voncke, who joined AVIV Group, Axel Springer’s online classifieds business for property, as chief executive in January 2021, said: “Axel Springer is fully supportive of the strategic review and formal sale process being undertaken by the Purplebricks board. We are confident this review and process will benefit stakeholders and support the long-term growth of the business.”
Axel-Ready to acquire at knock down price
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With the current PB share price down 91% from its all time high, (now 8.5p) Axel Springer could buy the balance of the shares they don’t already own now, however they would then have to run the business, which I don’t think was their aim.
AS bought 11.5% in 2018 for £143m and a further 14% for another £43.7m in 2019. At the time AS stated, “PurpleBricks has shown convincing revenue and profitable growth despite a challenging market environment”.‘an opportunity to participate in an innovative, fast growing business model in new markets’. AS might be better off next time buying a business rather than as it now seems a business plan!
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I wouldn’t want to be the Axel Springer exec who has to explain why I thought investing £186m into PB was such a brainwave. That’s a LOT of money to have lost, whoever you are.
But also very unsurprising given the fact that it never had a viable business model, because estate agency is too complicated to do well, cheaply.
It never ceases to amaze me how many people who know little about estate agency will pour hundreds of millions into disruptors only to always, and I mean always, lose it. No sale, no fee estate agency is fundamentally a good proposition to the consumer, and a healthy business if done well.
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