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TODAY'S OTHER NEWS

Takeover talks held between Purplebricks investors - claim

Talks are reported to have been held between Purplebricks leading shareholder, Neil Woodford, and the German publishing group Axel Springer about a takeover of the troubled agency.

The industry magazine Property Week this afternoon reports an unnamed source saying: “All it takes is a quick conversation with Woodford and Axel could be in control of Purplebricks. It’s a sensible assumption to make that those talks will have taken place and that Purplebricks is now in play.”

The PW report came before another piece of bad news for the agency - the suspension of Neil Woodford’s investment fund at the end of  City trading today.

Property Week says Axel Springer executive board member Dr Andreas Wiele, who is also a non-executive director of Purplebricks, is leading the German group’s negotiations. 

Earlier today Axel Springer paid over £43m to increase its holding in the company from 12.4 per cent to 26.6 per cent, buying its shares from the group’s co-founders Michael and Kenny Bruce.

The publication says Woodford “is understood to be a willing seller” following poor returns on his flagship Equity Income fund.

Earlier today we reported that Woodford had indicated his support for a possible closure of the Purplebricks’ US operation if it helped secure the future of the UK business, which has itself been suffering from falling volumes and heavy staff churn.

Purplebricks is already in the process of closing its Australian activities.

On his Woodfordfunds website, the star fund manager has spoken of the agency’s troubled past and long-term share price decline, but adds: “Nevertheless, [Purplebricks] is now profitable in the UK and the key reasons we originally backed Purplebricks still persist. It is the only online-focused, single brand, national, estate agency business in the UK which has achieved scale. There is still opportunity aplenty for this business, through the pursuit of market share and also by increasing the lifetime value of each customer.”

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    We commented on another article today and shocked Axel Springer would make such a foolish investment with the business declining in every market. As accurately reported, the UK is experiencing significant churn, the only market investors claim has a chance. Bruce brothers cashed in on the backs of hard working LPEs who received nothing. Not sure how they sleep at night with false promises. Vic Darvey is out of his league right now and there is no other leadership in the company. US is dead and Aus is out. This company is not worth 300M. KKR will rescue Axel Springer when they go private so at the end of the day, all institutional dumb money.

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