Axel Springer, the giant global publisher which poured millions into Purplebricks last year, is in talks with a US equity firm that could take it private.
KKR could launch an offer to buy out the minority shareholders in Axel Springer, which in March last year paid £125m for an 11.5% stake in Purplebricks.
The Germany-based company, with interests in global estate agents and property portals, then followed up with a further shares purchase to increase its stake to 12.5%.
Axel Springer paid £3.60 per share for its first investment – at the time a premium on price – and £3.07p per share for its second.
Yesterday, Purplebricks shares fell to below £1, at one stage to 97.5p, although finishing the day at 102p.
Axel Springer’s own shares, listed in Frankfurt, jumped by up to 23% after newswire Bloomberg reported the possible move to take the company private. Axel Springer has now confirmed this.
Going private shields firms from public scrutiny.
William Packer, analyst at investment bank Exane BNP Paribas, said that the move would improve Axel Springer’s firepower for future mergers and acquisitions.
The company has already expressed interest in purchasing eBay’s classified assets, and currently generates 60% of profits from online classified advertising in jobs and property.
Packer said that he expected other online advertising platforms, such as Rightmove, to benefit from Axel Springer’s attempt to go private.
He said that following the £2.2bn acquisition of ZPG by US equity firm Silver Lake, “there is strong interest in the sub-sector from private equity attracted to its structural growth, high margins and strong cashflow profile”.
He added: “We expect private equity interest in Axel Springer to benefit the peer group.”
Yesterday, Rightmove’s shares moved up over 3% to finish at an all-time high of 584p.
OnTheMarket shares also rose, by 2%, to 96.5p, but well down from a high of over 180p last summer.
Axel maybe looking to take Bricks private .They will have their own ideas on which future direction Bricks are heading .
Mix in Michael Bruce’sstake who is hardly likely to leave his stake dormant for others to manage .In addition Neil Woodford under the cosh with his funds will be taking an active role ,somebody will make a move. Fun and games to come. Bricks the gift that keeps on giving
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Is it squeaky bum time ?
Will Axel ride to the rescue now or wait to see the fireworks on 4th July?
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Going private shields them from public scrutiny. Shields them from public mockery more like given the tens of millions of pounds they have burnt through buying PB shares.
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Shields them from public mockery
They put in something like 1/4 of a gross years turnover into PB and lost it!
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