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Purplebricks recently announced to the stock exchange that it had received an acquisition offer from rival Strike.
strange? not much.
London Stock Exchange rules stipulate that approaches by potential buyers must be publicly announced, as they are sensitive to rumors, speculation and resulting share price movements. The rules also state that a “stand up or shut up” deadline will be imposed to clean up deceptive approaches.
So is Strike just window shopping here? I think so.
When a celebrity is in trouble, it makes me want to roll my belly out. The inner workings of that organization are exposed for competitors to pry for knowledge. Some kind of legitimate industrial espionage.
And, of course, there are PR benefits to appearing as potential offerers who are bigger and have more players than they actually are. A similar situation may or may not have happened when the Daily Mail once reported that Emoov was considering buying Countrywide PLC.
According to Forbes, Strike has well-funded backers, so it’s possible lead investor Charles Dunstone could fund the Purplebricks acquisition.
But are the fools and their money easily separated? So far, Dunstone and his colleagues seem to fall into the category Strike is concerned with. After all, this is the company once known as ‘simplicity’, and by March 2019 he racked up losses of £38.8m. I decided to double down like crazy and “sell” the service for free. result? 2020 and he will see his £15m further loss in 2021 plus whatever happens when the 2022 account is filed soon.
So let’s say round losses of £60m so far. Blimey, the fateful Emoov project didn’t lose too much.
I don’t think £60m to a billionaire is a big deal. This equates to the average UK earner blowing his £1500. However, if the Purplebricks business were acquired and the ‘philosophy of the strike’ applied, the acquisition would require him £25m and he would need a huge amount of cash to carry it out. becomes less important. Given Strike’s current £8m annual loss and Purple Brick’s current £20m annual loss, the proposed deal looks like nothing more than a financial death wish. money hole.
Perhaps pride wins out and Dunston doubles down on the madness again, trying to turn two bleeding patients into some sort of Frankenstein, or at least half-value organ donors?
Dunston’s pal at the Tosca Fund, a driving force behind his acquisition of Talk Talk business, founder Martin Hughes rarely shows failure, and a master at turning pig’s ears into a sort of silk purse. Note that we know all about such arbitrage tactics. Easyproperty’s absorption into The Guild (now the ‘nurtur’ group) is a prime example of this play, and recent performances saw him earn £800,000 under Jon Cooke. Given his relationship with Hughes, Dunstone sought their advice and later fell into the temptation to “go big” by smashing two of his users online for the purpose of re-floating the resulting entity. may be driven. Merging two rivals is risky, in terms of technology, systems, operations, team his fit, brand choice, etc. as well as culture his fit.
All this is fascinating, but I believe Strike is just flying a kite. They’re just kicking tires and are unlikely to succeed in their obvious quest to buy Purple Bricks.
No, Strike and Purplebricks remain the last surviving runts in the garbage of online realtors. Until they realize that they either fold or, like I did, they don’t “simply” work their cheap models by stacking up real estate agents high. Then you have to come up with what it will be instead.
In the meantime, reach for your popcorn and enjoy your practical jokes.
ProperPR co-founder Russell Quirk is a regular media commentator on housing and presenter of Money Talk on TalkTV’s YouTube channel.