A general meeting of Purplebricks’ shareholders yesterday agreed to the issue of new shares.
This is a key part of Germany-based media giant Axel Springer’s investment in Purplebricks.
At the meeting all resolutions were unanimously passed with 99.98 per cent of votes cast in favour.
As a result, the company’s directors have the authority to allot and issue 27,777,777 new ordinary shares of one penny each.
Axel Springer is investing £125m in Purplebricks, enabling the accelerated roll-out of the business in America and support entry into new markets, plus investment in technology.
It was announced in late March that of the total investment, £100m would be a subscription for new shares, subject to shareholder approval.
As part of the deal, Axel Springer also agreed to buy £25m of shares from founders Michael and Kenny Bruce, and from non-executive director William Whitehorn.
Axel Springer will now have a stake of around 11.5% in Purplebricks’ share capital. Axel Springer agreed to pay 360p per share, a premium of 15.8% on the shares, measured at the last closing day before the announcement. Yesterday, the shares closed at about 321p.
The new shares are expected to have been admitted for trading at 8am today.
Comments (9)
£125m is not being spent in the UK and is a drop in the ocean for the US. PB have nearly spent £100m to-date in the UK, so will it keep them going for another 5 years … only if they spend it in the UK, which isn’t planned. There is the clue, “entry into new markets” which again means nothing for the UK.
I disagree with both of you! I think Purplebricks are here to stay, but competition is ok, so there is no problem with that, though i feel they will have to adapt as the market changes. There call centre brothers though i dont feel will last, perhaps YOPA as they have significant backing, but the others not a chance. Tepilo, Emoov etc, losing more money year on year, gaining no extra market share. The Doorstops chap under threar from being booted off Rightmove. HouseSimple going no sale no fee will shatter their income.
So yes PB will probably be around in 5 years, but the others will more than likely have given up the ghost, but made their owners millionaires and LPEs redundant.
Nice one “ArthurHouse02”
Respectfully though, when you say “I disagree with you both” – what is it you disagree with in my post?
I disagree with the “Similar firms are here to stay”. As mentioned I feel that most of the call centre lot wont last due to their failure to turn a profit as their losses grow and the vast sums needed to stay afloat or raise publick awareness of them just wont be available. Like it or not most of the public have heard about PB, they may not know what they really do or charge but they have heard of them, likewise most of the public have never heard of YOPA, Emoov, HS, Doorstops, Tepilo and the others.
PB spend just under £20m a year on advertising themselves and they still arent any money. The call centre market share is growing at a snails pace and way below the expected share at this point As losses continue to grow for most of these companies, those propping them up will start to lose faith and walk away.
Thanks for that “ArthurHouse02”.
To be clear, I don’t anticiapate that ALL “similar firms are here to stay”. There will no doubt be casualties in this sector as in others. It’s a fascinating situation.
Agreed, the housing market crash of 2007/2008 forced many a business to close and others that survived to make redundancies. As the market changes and the public become even more wary of this pay upfront and pay if we cant sell your house model more will look at NSNF agents. These call centre types offering NSNF are having to raise their charges, having (in enforced) to prominantly display the other “catches” and are thus a lot less competitive compared to proper estate agents. Of PB, Tepilo, Emoov, HS and Doorstops I would reckon that 5 years today at least 2 of these either wont be trading at all or at least not in their current guise.
I disagree ” Property Poke”. Purplebricks and similar firms are here to stay. Whether we like it or not. Whether they are ever profitable or not. Whether we think they provide good service or not. Whether we even consider them to be estate agents or not.
It would be very naive to plan the next 2 to 5 five years on the basis that Purplebricks will not be around – a forlorn hope. and as we know…
Hope is NOT a strategy!
Without this investment, the model was on the way out.
I give them another 12-18 months.
PP in the E – For committing the mortal sin of dissing the purple ones you have condemned yourself to receiving the wrath of the Dom & Ducky duo – once they have trolled their way through the Chris Wood story.
Be brave. We will feel and share your pain. It will be like being savaged by a pair of butterflies. Poor you!