A number of agents listing with OnTheMarket will still have to observe the One Other Portal (OOP) rule after the business floats on the stock exchange.
The portal will be dropping the stipulation for new joiners, and is also lifting its ban on online agents. Emoov has confirmed to EYE that it has asked about joining.
While new joiners and those with new contracts will be free to list on all three of the main portals – Rightmove, Zoopla and OTM as well as others – those agents on existing contracts will have to stick to the original terms.
EYE asked for clarification of the OOP rule after the listing on AIM which is set for February 9.
A spokesperson for OnTheMarket.com said: “As a listed company with the increased funds to support marketing and growth following the placing, OnTheMarket will no longer require agents entering new listing agreements to commit to the One Other Portal rule.
“Our contracted agents who did not sign new five-year listing agreements remain on their existing terms, which include their commitment to observe the One Other Portal rule.”
We also asked about the number of agents now with OTM.
Previously, OTM has mentioned the “support” of 6,500 branches, although this figure included agents who had signed Letter of Intent to join OTM when total support reached 7,500 offices. OTM had said it had over 6,300 listing agents as at the end of June 2016 and 6,400 by the end of the following month. It then quoted a figure of over 6,000 in January 2017.
However, Friday’s statement to the London Stock Exchange cited a figure of over 5,500, the same number that Zoopla calculated as OTM’s membership in November last year when it claimed that a total of 1,000 branches had returned to it.
The OTM spokesperson would not say whether or not there has been a falling away of numbers, but told us that there will be an active recruitment campaign aimed at ramping up estate agent members, who will be promised “fair prices” and more.
The spokesperson said: “In the context of admission we are now fully focused on rapidly extending our customer base of estate and lettings agents, remaining committed to our core principles of offering sustainably fair prices for property advertisers and creating a premier search service for the most active property-seekers.
“The IPO will enable us to implement our marketing plans to build brand awareness and portal usage as well as to invest to scale up the supporting organisation and infrastructure to the benefit of consumers, agents and investors.”
Russell Quirk, founder of online agent Emoov, told us that he emailed OTM about joining on Friday – the same day it announced its stock market debut.
* According to a report in The Times on Saturday, backers of OTM include fund manager Schroders, which is taking a 6% stake, and Jason Walker, who has paid £3m for a 3.1% stake. Walker is the entrepreneur behind online bathrooms business Victoria Plumb.
A number of newspapers have criticised the flotation as falling short of what had been first proposed but it is possible that some investors may have been deterred by the possibility of ongoing litigation.
Just before Christmas, Connells brand Gascoigne Halman won leave to appeal the decision by the Competition Appeal Tribunal that OTM’s One Other Portal rule was lawful.
This is disgusting. The original agents who supported OTM from the beginning, and have been royally shafted at every turn are now being done over again, is this even legal? New agents coming in on cheaper fees, more flexible terms and no portal restrictions, what a shambles this is. Like one of those car insurance companies where new customers only get the best deals, what happened to loyalty Mr Springett
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I think it is legal but none too pleasant … that’s business. At the time the share/float offering was made I had just decided to list with Zoopla again in part as they had been utterly convinced that the Gascoine case would be confirmed, ie that he OOP rule was not legal. I agreed but Zoopla & I were wrong, for now. I see that Gascoine have won the right to appeal.
My reading of the float rules were clear, if you want a contract without OOP then you must support the float and move to a new contract. If you did not support the float and did not agree to a new, longer contract then you would be bound by OOP rules.
In my own case for the 6 months or more between rejoining Zoopla and eventually getting on to the new contract, a period during which they hid all of my listings from On The Market, I stopped paying my monthly subscriptions as soon as I found that OTM were hiding my listings. Their view is breach of OOP contract, mine is no service no fee and OOP is being dropped anyway.
I hate arguing with a concept which I stuck my neck out to support from the outset as a Gold Member. I feel that I supported them and want to continue to support them, not argue. OTM may well be able to challenge the other two and I’d like to be able to feel good about supporting them. Some positive, friendly negotiations with their members & supporters would go a long way to re-establishing a more positive environment.
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Sadly Michael, there was very little “listening & positive friendly negotiations” when OTM Mutual was the pre “flog-it” portal.
As a “I’m Leaving” Gold Member I see how deep their trenches are dug.
From a lamentable circa £1.65 it can surely only go up? If if goes the other way it’s lamentable & sadly laughable that so much money has been wasted for nothing.
I suppose those looking to buy in cheap have a great opportunity at the bargain starting sp, it’ll be interesting to witness whether Boom or Bust.
For me, they never delivered on Hype V1, Hype V2 fell short by 20 Million! ….and I see Hype 3 staring over The Abyss.
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I don’t understand how people couldn’t see this coming.. whilst the intention of the portal was admirable, the whole model was flawed. Now Mr Springett is grinning from ear to ear.
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Not so clever holding NO voters to an original contract that is so materially different to what they signed up too?
I suspect that this may rightly be the basis of any new legal challenge as it is so clearly unfair to those members who felt betrayed and are now being punished?
Springett must be sweating at the moment praying that he crossed all the t’s, dotted the i’s and disclosed all important information to Eversheds and others that may effect the future of OTM for which, as CEO, he is legally bound and has a duty of care in which to do so?
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This is hilarious
you couldn’t make it up
go to jail, straight to jail without passing go
a game of monopoly and jeopardy to make a few people a fortune at other people’s expense is usually called fraud
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To me this just seems like posturing to get some agents to sign up to the long term contracts. When originally sold the idea of Agents Mutual / OnTheMarket.com agents asked the question why would I risk coming off the either Zoopla or Rightmove ?? The answer given was that “EVERY” other agent on the new portal would also be making that commitment.
At that point it was not declared that at a later date, before the end of the original contracts, that agents would be given an option to pay a Fee (i.e. commit to a longer contract) to avoid this restriction – without this being declared up front, being given the rights for agents to list where they want, or the ability to terminate their current contracts I would say that OTM are on very shaky ground legally.
I can imagine that the money raised in the float is going to be spent on a series of legal cases rather the marketing they would like it to be spent on…..
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Bearing in mind the story above that an agent cannot enforce its contract due to non disclosure , did Ian mention at the “float or bust ” meetings that he had planned this all along …..from the meeting with connells, countrywide and LSL , taken from the Gascoigne halman court case docs ….embarrasing to say the least
Meeting notes of 21st Jan 16 – David Livesey, Connells; Alison Platt, Countrywide; Ian Crabb, LSL Holdings.
• 98BMeeting effectively ‘convened’by DL. Relatively short notice.
• 9BIS opened: big potential opportunity to combine AM existing membership strength with their strength to create the market leading portal.
• 10BAs a publicly quoted business, potential market cap could reach several £Bn – why not own it?
• 10BIC queried the route map – how to advance the business to and beyond the tipping point. Would this work from an economic viewpoint? IS covered the switch of their 90,000 listings from Zoopla and the likely surge in agent membership. Our model works on conservative ARPA and still generates big surpluses. • 102BIS set out the route map to the ownership model needed. o 103BDisinvest elsewhere o 104BEnter contract with AM (inc OTM + 1) and invest in 0% loan notes with a multiple return at the end of the term contract.
o 105BInclude a ‘conversion’ clause in the event the Company moved to ‘limited by shares’
Proposition two members: close membership, IPO (at say £500M). Issue equal shares to current membership and authorise further issue for capital raising and to incentivise key agents. Each current member holding would have paper value of £100k after dilution of their stake to 60%. Some of the shares used to raise capital, others to meet conversion from Loan Notes, others to incentivise further key firms (ZPG partners). Further agents joining OTM are just customers. o 107BAll members remain OTM + 1 and this gets us past tipping point 1 towards tipping point 2 where we are seen as strong enough for agents to begin withdrawing from Rightmove.
o 108BEndgame – 15,000 branches at an avg monthly fee of say £1000 with no real need to list anywhere else. £118M income before any other revenue sources. o 109BUnder any scenario, the members need to be protected and receive the elements of the proposition they bought into = sustainably reasonable and fixed listing fees, no internet-only.
• 10BAP queried the desire of the ZPG partners to join. IS said conversations had taken place, with one interested in joining simply to support the principles of what we are currently doing and another looking for a financial incentive. None seem locked to ZPG.
• 1BDL pushed dropping one other portal and AP supported, saying the market should decide and the best portal would win – they would provide us with extra stock to put us in the game. IS said there is no magic – RM is now the only portal with near 100% stock and matching income so is winning. Would not have entered the market on any other basis than agents backing and directing their stock via OTM + 1 rule. Still plenty of mileage in that and consistent with the ‘most interesting scenario’.
• 12BIS asked what success resulted from them supporting OTM looked like for them. DL said it would be really strong portals competing, with them potentially benefitting from an investment in one or more.
• 13BDL asked what we would do if the three of them don’t join. IS said we would carry on growing organically with the support of the small and medium firms which still represent the majority of the market. OTM + 1 would remain as it is key to reaching the No. 2 position as the first milestone.
• 14BAP queried the strategy – internet denier/consumer wants internet only. IS said pure internet plays are simply parasites only viable because the portals allow them to operate alongside the main customer base of high street firms. Why allow margin to be eroded in this way and allow this business model to flourish at agents’ expense. As the market currently operates, the portals win either way.
• 15BAP asked how we value the business. IS said (1) create a business projection based on the 3 joining OTM + 1 which would show strong forward profit and cash generation; then (2) approach an investment bank for a view on IPO value. IS said we all probably new suitable investment houses – it was agreed that it should be done by AM to avoid hares running. All felt Close Brothers would be a credible source for this. The forward income worked just based on UK resi listing fees but there would also be substantial further revenue potential from Overseas, Commercial, and commercial partnerships provided these did not detract from the core purpose.”
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It’s a complete car crash.
Investor would be mad to get involved. Once it’s launched share price will only go one way.
No usp’s no support from new agents, no good will from current members.
Why would any investor take a punt (that’s what it is) on this?
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Shocking really. If I am reading this correctly those on the original contracts are to be seriously disadvantaged by not listing on all three. Then again they could be saving money as being on all three is a pointless waste of money!
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Saving Money….perhaps ; but I would imagine “punished” for not supporting the board is more likely the way it would be argued in the courts.It is afterall a restriction, and (subject to the floatation of course) it’s no-longer a case of everyone is in the same boat.
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Perhaps it is the same boat David M, unfortunately, it is likely to be the Titanic.
Do things ever change because:
A very large proportion of first-class passengers got into the lifeboats first and prospered thereafter?
Including the White Star President Joseph ‘Bruce’ Ismay who was lambasted as a coward for the rest of his life.
Any potential comparisons here?
Did Ismay know the ship was sinking before the other passengers?
What would investors have done if they knew the Titanic would hit an iceberg on her Maiden voyage?
Could RM be an iceberg as it may now prevent agents from deferring their listings?
That is unless a proper estate agent can come up with a viable plan to actually drive the share price forward?
This would, of course, require Ismay to forego his seat and possessions in the lifeboat but this would allow other ‘key’ first-class passengers to survive a horrible ending?
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Before any official enquiry is held into the consequences and any omissions of this disaster.
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There isn’t a Hot Air Balloon large enough to accomodate all the Hot Air flowing from OTM. The Hindenburg disaster springs to mind visually!
It’s disloyal, it’s unprofessional, it’s shameful….. yet IS & Co seem incapable of understanding how they have, and are, alienating Our Industry with their management of what was? supposed to be the New Portal Beacon.
Here’s the thing, a prospective New Agent joins on better terms than the existing agent? …..the existing agent that wants to leave …..but is handcuffed to OTM?
So, the Vendor who went to court story on PIE today that has effectively won their case on the basis of non-disclosure? …… where does that fit here?
We have OTM that was Mutual, now about to Float having failed its own widely stated 50 Million Pound Funding Target, it becomes VodaOTMesque and yet those wishing to leave are locked in?!! I got shafted by The Equitable Life debacle…. and sadly I’m reliving that dream now with this debacle
This scene unfolding before us is only missing balaclavas!!! We even know who The Suspects are…. it’s utterly shameful behaviour.
Our Industry foolishly trusted what we were told…. you think we would have known better. Clearly not.
It’s the Unwanted Gift that just keeps on Giving, the Unwanted Relative that arrives at Christmas, the Unwanted thing stuck to your shoe….. Ladies & Gentlemen, Welcome to OTMEnders! …..next episode along shortly!!
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What’s even worse that I think the product OTM offer is nowhere near as good as Zoopla or Rightmove! If I’m a prospective buyer or tenant then no way would I use their portal. Their branding is sadly weak.
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The whole outfit is as slippery as a handful of snakes in a bucket of snot.
I was a starter silver member who has been shafted each way I’ve turned.
If anyone in the industry is still even CONSIDERING getting involved with this miserable bunch, have a word with yourself, save yourself time and grief and simply throw your money in the nearest river every month.
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As a ‘No’ voter I phoned my BDM a few months ago to ask this question and was told the 2 portal rule would still apply as I hadn’t signed a new contract.
I think it’s disgusting that they can totally change the set up and ethos of the business yet hold us to our side of the contract. Totally unethical shower of s**t in my opinion! The complete opposite of what we were ‘sold’ at the beginning.
Still, I am looking forward to selling all of my shares ASAP! Which I can do as I haven’t signed the new contract 🙂
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Hoping that the shares drop like a stone at the outset, so I can buy some – they might be worth something when they return to their IPO price
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I’ve got 17,000, you can buy mine for £1.65 a share 🙂
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Would Pat Phelan be a more popular CEO?
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