A prominent Purplebricks shareholder who made an 11th-hour takeover bid for the online estate agency last week has withdrawn its offer.
Lecram Holdings – an investment vehicle run by Adam Smith – put forward a 0.5p per share proposal last Friday, valuing the company at around £1.5million.
The approach came one week after Purplebricks agreed to be acquired and have its liabilities assumed by rival Strike Ltd for a token price of £1.
Stand down: Lecram Holdings – an investment vehicle run by Adam Smith – has withdrawn its 0.5p per share proposal for struggling online estate agency Purplebricks
Lecram said its alternative offer gave shareholders the ‘certainty of cash now rather than vague promises from a discredited board of something more somewhere down the line’.
But on Wednesday, Purplebricks told investors that Lecram had taken its proposal off the table and was not planning to make another bid.
It continues to recommend they support the Strike offer, which is set to be voted on at a general meeting on 2 June.
Strike is backed by Carphone Warehouse and TalkTalk founder Sir Charles Dunstone, who is also a partner at major Strike shareholder Freston Ventures and Channel 4’s investment arm.
The group’s deal will involve Purplebricks paying up to £5.5million in cash from its balance sheet towards expenses and costs, but essentially wipe out investors.
Paul Pindar, the firm’s chairman, who also holds a 5 per cent stake in Purplebricks, admitted he was ‘disappointed with the financial value outcome’.
He added: ‘However, there was no other proposal or offer which provided a better return for shareholders, with the same certainty of funding and speed of delivery necessary to provide the stability the company needs.’
Lecram’s Adam Smith has long sought to remove Pindar, who has held his post since 2014 after spending more than two decades at outsourcing giant Capita, where he was managing director and later chief executive.
Last November, Smith called on investors to remove Pindar and replace him with former Countrywide boss and Rightmove founder Harry Hill.
In a public letter to shareholders, he said the chairman had presided over a ‘disastrous’ performance at Purplebricks, with its share price plummeting more than 99 per cent from its 2017 peak even while the broader UK property market had remained significantly buoyant.
He also noted the company had gone through four chief executives, five chief financial officers ‘and many other changes in senior executives’ during Pindar’s tenure, and has ‘dwindling’ cash resources.
Yet at the shareholder meeting in December, his two resolutions failed to pass, with 71.7 per cent of votes opposing the motion to remove the chairman.
Founded in 2012, Purplebricks was once valued at £1.4billion, but has struggled for years with high losses caused by a failed expansion overseas, declining market share and difficulties in its lettings business.
Purplebricks shares were 3.2 per cent, or 0.02p, up at 0.65p on Wednesday morning.
