Efforts being made against the clock to find new investor for easyProperty

Major efforts have been made to keep easyProperty afloat by bringing on a third party investor.

It is not known how long these efforts have been going on for. However talks still appear to be ongoing although time is running out for the online agency said to show no sign of becoming profitable.

The revelations are made in a document in which Toscafund is bidding to take over the entire eProp company which includes The Guild of Property Professionals, Fine & Country and easyProperty.

The document says: “Toscafund notes the current efforts being made by the eProp Board to source third party investment in its easyProperty licensing business, one outcome of which may be that eProp does not retain majority economic control over easyProperty.

“Toscafund is entirely supportive of these efforts.

“In the event that the offer is concluded while these discussions are ongoing, then it is Toscafund’s intention that these discussions be continued and, if commercially possible, completed.

“In the event that an acceptable outcome of these discussions cannot be reached in a reasonable timeframe, then Toscafund reserves the right to consider, in conjunction with the executive management, other strategic options for easyProperty, one of which may be its closure.”

The bid offer says that Toscafund supports the strategy of growing both Fine & Country and the Guild.

But of easyProperty, the document suggests that the online estate agency offering has not recently been a good fit with estate agents.

The online/hybrid model has “despite not growing market share, placed additional pressure on fees”.

The document also says that falling transactions are a problem, and that consolidation across the market is expected.

The document, which values eProp at almost £18m, sets out terms for shareholders to sell their stakes at 50p a share.

Toscafund, already the largest shareholder in eProp, would be buying out other owners of the company. It has already bought out the stake of easyProperty founder Robert Ellice.

Toscafund says that there has been a power battle among the main shareholders as to the direction of the business.

It makes clear in its bid document what its own intentions are.

The offer to shareholders says: “Subject to the above comments concerning easyProperty, Toscafund has no intention of reducing headcount within eProp.

“Robert Ellice will also resign from the eProp Board on completion of the offer. Toscafund confirms that it intends to safeguard fully the existing employment and pension rights of all eProp management and employees in accordance with applicable law and to comply with eProp’s pension obligations for existing employees.

“There is no intention to make any material changes to the conditions of employment or the balance of skills and functions of the employees and management of the eProp Group.”

It also makes it clear that Jon Cooke and Marcus Whewell should continue to lead the company as, respectively, CEO and chief operating officer. Toscafund says it notes that both men do not intend to sell their own shares, “preferring to remain as equity owners of the company”.

The timescale for the takeover – should it go ahead – is likely to be short, and shareholders will be invited to vote following publication of eProp’s results for last year, due to be published at the end of this month.

The offer to buy out the other shareholders was, according to the document, “unsolicited”, but has been unanimously recommended by eProp directors.

The bid has been put together by Tosca Acquisition Limited, a new company specifically formed by Toscafund for the purposes of making and implementing the offer.

Toscafund also backs Purplebricks and Housesimple.

At Purplebricks, where it has taken out a 5.6% stake, it may be reassured by main stakeholder Neil Woodford declaring in a post on his website Woodfordfunds that the business can succeed despite the turbulence of founder Michael Bruce’s departure and the closure of its Australian business, with a review of Purplebricks in America.

Woodford said it would support a decision to close in the US and that Purplebricks should concentrate on the UK and Canada .

The post adds: “Whilst the UK property market remains challenging, Purplebricks continues to outperform the market and the company is clearly confident about the future of the business.

“Having established a market-leading position, there remain many opportunities for further profitable growth.”

EYE NEWSFLASH: easyProperty likely to close after equity firm bids for parent company

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15 Comments

  1. J1

    I hear a funeral march coming around the corner.
    Where can we get an “Easyflop”  wreath made?

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  2. JustPlainSavage04

    All the gear but no idea these online/ Hybrid disrupters.

     

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  3. jeremy1960

    They shoot horses don’t they? This particular horse is well overdue that bullet!

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  4. Robert May

    “Having established a market-leading position, there remain many opportunities for further profitable growth.”

     

    What deluded ego dominated world does this bloke inhabit, he is buying the instructions he has!

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    1. cyberduck46

      >Woodford said it would support a decision to close in the US and that Purplebricks should concentrate on the UK and Canada .

       

      Talking about the UK business without the US & Oz I think.

       

      >What deluded ego dominated world does this bloke inhabit

       

      Coming from the man who claims to have “built a strong and honest industry”.

       

       

       

       

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      1. Robert May

         There is a difference between  stating fact and ego. If anyone wants to say I did not stop 95% of #portaljuggling I am more than happy to defend the claim.
        According to the boss of  Rightmove they now employ 12 people to monitor the gaming I monitor and identify

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      2. Woodentop

        Woodford is trying to bolster his failing share value.

         

        Coming from the man ……..
        Cyberduck46: 16.01hrs 14th May 2019
        “The fact I don’t have any experience of being an Estate Agent is irrelevant”
         

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      3. Property Pundit

        #doyourownresearch

        #justaproxy

        #Notarecommendationthatthesharesaregoodvalue

        #stillattentionseekingonPIE

         

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  5. WiltsAgent

    Call Axel Springer.

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  6. Typhoon

    Why bother ?

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  7. Robert May

    I’ve got a lot of time and respect for Jon & Marcus.  Reading this if I had a magic wand I would be asking for a couple of hours with Jon and Tosca to explain  how  estate agency was resilient to the  challenge by the Pru an Black Horse in the mid 80’s and has never waned more than 20 % from a fully independent path.  
    Despite all the money thrown at disruption the selling public use agents who they apparently despise (they don’t). 95% of vendors chose a traditional agent to sell their home, surely the Tosca cash is  more wisely spent on achieving things that could be achieved rather than  burning more cash on a  changing a world that refuses to change.
     
    Jon and Iain with F&C and the Guild have a  solid base of  some of the very best agents in the country. as anything that eventually challenges the duopoly will  incled those agent and those agents are seeking to challenge the way things are right now  on multiple fronts, it seems to me there are two options back disruption or challenge the things challenging a  sizeable  userbase which if you think about it differently to most makes Jon Cooke more influential than any other group agency boss.

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  8. s71

    Can someone please explain to me how they managed to value eProp for 18 million

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  9. haveathink

    Woodford likes the model – he should do, he owns something like 25% of PB couldn’t sell any shares because a) it would dilute the value in the rest of his holding b) he is under severe pressure to keep more of his fund in listed shares as he has/did (depends on your interpretation) break the regulatory rules for having too much ‘unlisted’ funds.

    Canada might be profitable – they bought an existing business, retained the vast majority of staff, and have no plans at present to brand as PB.

     

     

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  10. Pinky and The Brain

    How much are they worth? ….Pick a number any number…..18m …ok now your having a laugh!!

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  11. Woodentop

    It reads, if they can’t find an investor without Toscafund, it will be shut down. Therefore it will be shut down.

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