|
OnTheMarket PLC shares soared on Thursday after it agreed to a takeover from indirect CoStar Group Inc subsidiary CoStar UK Ltd for around £99 million. OnTheMarket also reported a swing to a loss in the first half of its financial year. Shares in OnTheMarket were up 53% at 107.52 pence each in London on Thursday morning, while CoStar closed down 2.7% at $77.66 in New York on Wednesday, rising 0.1% in after hours trading. OnTheMarket is an Aldershot, Hampshire-based property listing website. CoStar is a Washington, DC-based online real estate marketplace, information and analytics provider in the commercial and residential property sector. The offer consists of 110 pence per OnTheMarket share, valuing the firm at around £99 million, and at a premium of 56% to OnTheMarket’s closing price of 70.50p on Wednesday. The deal is already supported by the owners of 29.5% of OnTheMarket’s share capital, including its six largest shareholders, while CoStar said the deal represents an ‘attractive strategic entry point’ to enter the UK residential property market. OnTheMarket directors intend to unanimously recommend that shareholders vote in favour of the takeover at a court meeting and general meeting. OnTheMarket expects the transaction to close in the fourth quarter of 2023. ‘We believe the acquisition of OnTheMarket represents an attractive and efficient entry point for CoStar into the estimated £8 trillion UK residential property market. We are excited to welcome the OnTheMarket team to the CoStar family,’ said CoStar Founder & Chief Executive Officer Andy Florance. OnTheMarket CEO Jason Tebb commented: ‘From a position of strength, partnering with CoStar will significantly accelerate our strategy with the clear target of becoming the market leader, whilst staying committed to fair and sustainable pricing. ‘CoStar will bring industry-leading global expertise and significant financial firepower to invest in OnTheMarket, allowing us to accelerate our transformation of the sector.’ Sky News reported that the CoStar takeover would give OnTheMarket the firepower to take on competitors such as Rightmove PLC and Zoopla Ltd. Rightmove shares were down 12% to 505.40p each in London on Thursday morning. Investor Oryx International Growth Fund Ltd also noted the proposed acquisition. OnTheMarket also reported interim results for the six month period to July 31, with revenue up slightly £16.9 million from £16.8 million as the firm swung to a pretax loss of £79,000 from profit of £92,000. ‘The macro-economic backdrop remains challenging, particularly for the property market, with lower transaction volumes, stubborn inflation, high cost of living, higher interest rates and a reduction in average house prices,’ OnTheMarket warned. In the second half of its financial 2024, OnTheMarket said it will focus on customer retention and acquisitions, which the board believes will ‘accelerate growth in future periods, while maintaining a level of marketing spend to maximise portal traffic and lead generation for customers’. As a result, OnTheMarket conceded its previously stated aspiration of growing both revenue and profits from the previous financial year ‘may not be realised’. Copyright 2023 Alliance News Ltd. All Rights Reserved.
|
