Purplebricks shares tumble further as rival Strike moots asset deal
Strike has pulled out of a takeover offer, but is in exclusive talks to potentially acquire the business and assets of Purplebricks.
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Your support makes all the difference.Troubled online estate agent Purplebricks has seen its shares plummet to yet another record low after revealing exclusive talks with rival Strike over a deal, but reiterated warnings there would be little to return to shareholders.
The group’s stock crashed to just over 1p at one stage on Thursday following the announcement after the market close on Wednesday that online estate agent Strike was pulling out of bidding for the whole share capital of Purplebricks.
Instead, it said it was in talks over a possible deal to buy the business and assets of Purplebricks.
Purplebricks said that should this go ahead, any return to shareholders would “likely to be at a level below the current share price” of 1.9p at market close on Wednesday.
It stressed the exclusive talks do not stop it from pursuing a takeover offer for the whole company.
Strike – formerly called Housesimple – is backed by investors including Carphone Warehouse and TalkTalk founder Sir Charles Dunstone and Channel 4 Ventures.
It comes just a day after Purplebricks alerted that its cash reserves were under threat.
It said it was now not set to return to cash generation early in its financial year to April 2024 and that its cash reserves would be at risk if a strategic review and sale were not completed soon.
The firm has suffered amid a difficult 18 months, with an overhaul of its operating model, multiple management reshuffles and shareholder calls for the removal of its chairman Paul Pindar.
The group put itself up for sale in February after disclosing its turnaround plans have been costlier than expected and it is set to sink deeper into a loss.
Founded in 2012, Purplebricks had a lot of success in its early years, disrupting an old industry.
In 2017 the company’s shares were selling for about £5 each, but their value has now been decimated, falling by 94% over the past year.