OnTheMarket founder blasts takeover as “short-termism on steroids”

OnTheMarket founder Trevor Abrahmsohn has accused the company’s shareholders of taking “gain today for pain tomorrow” after they agreed a £100m takeover deal with CoStar Group.

The scheme was approved by over 94% of the property platform’s shareholders, while CoStar, a real estate information company, has committed to spending £46.5 million on sales and marketing in the first full year following the integration.

But Abrahmsohn, who is now chief executive of luxury estate agency group, Glentree International, is unhappy with the deal, as he previously argued it underestimates OTM’s shares by around 33%.

He said: “Sadly, the agents last vestige of independence and control will be gobbled up by CoStar as the majority of shareholders in OTM have agreed to take the money and run!

“Unfortunately, this is ‘short termism on steroids’ and they will rue the day that they took gain today for pain tomorrow.

“I must congratulate CoStar, they have bought significant market share at a bargain price and the ‘lemming syndrome’ is alive and well amongst our estate agent brethren.”

Abrahmsohn founded OnTheMarket in 2010 in response to rising tariffs placed on agents by Rightmove and Zoopla, as it’s operated as a lower cost alternative since.

After sealing the deal, CoStar pledged to spend six times what OnTheMarket currently spends to drive more customers to the portal, as well as three times the current annual media spend of Rightmove.

It pledged to continue to charge a smaller proportion than the likes of Rightmove.

But Abrahmsohn added: “Not only have they given up a chance to multiply their investment but, as they will find out to their cost, tariffs will rise exponentially, and they will be on the menu when the BBQ banquet is being organised by not two, but three portals.

“It’s incredible when you think about the fact that agents own and control the data and the money that the portals thrive and depend on, and yet, counter-intuitively, you would have thought that the control of the process would, or should, never be lost.

“Having set up OTM in the first place and worked tirelessly for eight years without a scintilla of remuneration and invested half a million pounds in order to encourage other institutional agent shareholders to do the same, I think I have done more than my bit for King and country.

“I bid a fond farewell to the high hopes and ideals that was the bedrock of my rationale but unfortunately there are ‘non so blind as those who don’t want to see’.”

PropertyWire has contacted OnTheMarket and CoStar group for comment.

OTM’s update to the city is as follows.

 

RECOMMENDED CASH ACQUISITION of ONTHEMARKET PLC (“OnTheMarket” or the “Company”)by COSTAR UK LIMITED (“CoStar UK”), a wholly-owned, indirect subsidiary of COSTAR GROUP, INC. (“CoStar”)

Results of the Court Meeting and the General Meeting

On 19 October 2023, the Boards of CoStar UK and OnTheMarket announced that they had reached agreement on the terms of a recommended all cash offer pursuant to which CoStar UK, a wholly-owned, indirect subsidiary of CoStar, would acquire the entire issued and to be issued share capital of OnTheMarket (the “Acquisition”). The Acquisition is to be effected by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006 (the “Scheme”), full details of which were sent, or made available, to the shareholders of OnTheMarket in the circular dated 7 November 2023 (the “Scheme Document”).

Results of the Court Meeting and the General Meeting

The Board of OnTheMarket is pleased to announce that, at the Court Meeting and General Meeting (together, the “Meetings”) each held earlier today, the requisite majority of Scheme Shareholders voted (either in person or by proxy) to approve the Scheme at the Court Meeting and the requisite majority of OnTheMarket Shareholders (either in person or by proxy) voted to pass the Special Resolution (as defined below) in connection with the implementation of the Scheme, including the amendment to OnTheMarket’s articles of association, at the General Meeting.

The Scheme was approved by 945 Scheme Shareholders, together representing 94.22 per cent. of Scheme Shareholders who voted (either in person or by proxy) (see footnote ** to the table for the Court Meeting below) and 97.28 per cent. by value of those Scheme Shares voted.

The Special Resolution at the General meeting was approved by 97.89 per cent. of OnTheMarket Shares voted (see footnote *** to the table for the General Meeting below).

Overall, shares voted at the Court Meeting and General Meeting represented 66.04 per cent. and 62.89 per cent., respectively, of the issued share capital of OnTheMarket.

The resolutions were therefore duly passed. Full details of the resolutions passed are set out in the notice of the Court Meeting and the notice of the General Meeting of OnTheMarket contained in Parts 9 and 10 of the Scheme Document, respectively.

The total number of OnTheMarket Shares in issue at the Voting Record Time was 80,207,785. OnTheMarket does not hold any ordinary shares in treasury. Therefore, the total voting rights in OnTheMarket at the Voting Record Time were 80,207,785.

Voting results of the Court Meeting

The Court Meeting sought approval from holders of Scheme Shares for the Scheme. Each Scheme Shareholder, present in person or by proxy, was entitled to vote one Scheme Share held at the Voting Record Time and voting was by way of a poll.

Details of the votes cast were as follows:

Results of the Court Meeting No. of Scheme Shareholders who voted** %* of no. of Scheme Shareholders who voted** No. of Scheme Shares voted %* of Scheme Shares voted No. of Scheme Shares voted as a %* of the issued ordinary capital eligible to be voted at the Court Meeting
For*** 945 94.22 51,522,609 97.28 64.24
Against 58 5.78 1,442,929 2.72 1.80
Total 996 100 52,965,538 100 66.04

Notes:

* Rounded to two decimal places.

** Where a Scheme Shareholder has cast some of their votes “for” and some of their votes “against” the resolution, such Scheme Shareholder has been counted as having voted both “for” and “against” the resolution for the purposes of determining the number of Scheme Shareholders who voted as set out in this column. In this instance, 7 Scheme Shareholders voted both “for” and “against” and are therefore counted twice when calculating percentages, however, only 996 Scheme Shareholders voted in total.

*** Any proxy appointments which gave discretion to the Chair have been included in the vote “For” total.

Voting results of the General Meeting

The General Meeting sought approval for a special resolution for the purpose of giving effect to the Scheme and associated amendments to the articles of association of the Company (the “Special Resolution”). A copy of the Special Resolution passed at the General Meeting will shortly be available for inspection on the OnTheMarket website at https://plc.onthemarket.com/recommended-cash-acquisition/.

Each OnTheMarket Shareholder, present in person or by proxy, was entitled to one vote per OnTheMarket Share held at the Voting Record Time and voting was by way of a poll.

The Special Resolution was duly passed by the requisite majority.

Details of the votes cast were as follows:

Results of the General Meeting No. of OnTheMarket Shares voted % of OnTheMarket Shares voted* % of OnTheMarket Shares voted as a % of the total number of OnTheMarket Shares in issue*
For** 49,375,091 97.89 61.56
Against 1,066,434 2.11 1.33
Withheld*** 1,007,172
Total 51,448,697 100 62.89

Notes:

* Rounded to two decimal places.

** Includes proxy appointments which gave discretion to the Chair of the General Meeting.

*** A vote withheld is not a vote in law and is not counted in the calculation of the proportion of votes ‘For’ or ‘Against’ the Special Resolution.

Next steps and timetable

The outcome of today’s Meetings means that Conditions 2(a) and 2(b) (as set out in Part 3 of the Scheme Document) have been satisfied. The Acquisition remains subject to the satisfaction or (where applicable) waiver of the remaining Conditions as set out in Part 3 of the Scheme Document, including (amongst other things) the sanction of the Scheme by the Court at the Sanction Hearing and the delivery of a copy of the Court Order to the Registrar of Companies.

The expected timetable of principal events for the implementation of the Scheme is as set out below. The dates are indicative only and are subject to change. The dates will depend, among other things, on the dates upon which: (i) the Conditions are satisfied or (if capable of waiver) waived; (ii) the Court sanctions the Scheme; and (iii) a copy of the Court Order is delivered to the Registrar of Companies.

If any of the expected times and/or dates change, the revised times and/or dates will be notified by OnTheMarket through a Regulatory Information Service. Any revisions or changes to these dates and/or times will be notified in the same way. 

Capitalised terms used and not defined in this announcement have the meanings given to them in the Scheme Document.

All references to times are to times in London unless otherwise stated.

Event Time and/or date
Sanction Hearing (to sanction the Scheme) 7 December 2023
Last day of dealings in, and for registration of transfers of, and disablement in CREST of, OnTheMarket Shares

 

11 December 2023
Scheme Record Time 6.00 p.m. on 11 December 2023
Dealings in OnTheMarket Shares on AIM suspended 7.30 a.m. on 12 December 2023
Effective Date 12 December 2023
Cancellation of admission to trading of OnTheMarket Shares At 7.00 a.m. on 14 December 2023
Latest date for despatch of cheques in respect of cash consideration and for settlement of cash consideration through CREST or other form of payment

 

Within 14 days of the Effective Date
Long Stop Date 30 April 2024(1)
(1) This is the latest date by which the Scheme may become Effective unless CoStar UK and OnTheMarket agree, with the consent of the Panel and (if required) the Court, a later date.