Fresh details have emerged about the financial difficulties suffered by Emoov, its search for a buyer and its possible sale price.
A leak from an individual within the agency - which only this spring merged with Tepilo and online lettings platform Urban - says several companies, thought to be mostly traditional estate agencies, have made contact with Emoov since Sky News broke the story last evening of a possible sale.
The leak confirmed that City consultancy Arden Partners had indeed been asked to find a purchaser and that talks had gone on with High Street agencies in recent weeks.
But the source told Estate Agent Today that the sum which Emoov expects to settle for would be well below the £100m widely believed to be the sum involved at the time of the merger.
The source says that there is an awareness within Emoov that since last May, when the merger was announced, the share price of Purplebricks had dropped considerably, and that this was being regarded as something of a benchmark for the value of hybrid agencies.
Therefore it is apparently accepted within the company that a likely acquirer would offer “much, much, much” less than the £100m spoken of as the value of the merged company six months ago.
The source says the acquirer is likely to come from one of four categories - traditional agencies, other online/hybrid operators, software companies or international property companies (some of which had already approached Emoov with a view to replicating its activities in other countries.)
Post-merger Emoov - which took on most of the Tepilo and Urban headcount - has 140 staff including 45 agents ‘in the field’; all of these are still in place. In addition, it has been taking on roughly 850 listings per month, split about two to one in favour of sales over lettings.
The source also gave Estate Agent Today an insight into the discussions which led to the sale decision.
In the weeks leading up to the merger being finalised a major backer, thought to be Northern & Shell, had allegedly failed to provide an expected eight-figure investment; instead it reduced the sum sharply. This in turn meant other backers limited their financial support.
That meant that instead of considering an IPO in the first or second quarters of 2019 - at one time an aspiration of Emoov’s - the company instead had a substantial shortfall of funding almost immediately after the merger with Tepilo and Urban had been announced.
A crowdfunding appeal went ahead, but whereas this had been intended to effectively ‘top up’ the larger investment, it became one of the few sources of funding received by Emoov post-merger.
More details are likely to emerge in the next few days.