Major Purplebricks shareholder’s stake down by half - claim

Axel Springer’s investment in beleaguered online agent Purplebricks is now worth half its original value, it has been claimed.

An article by German newspaper Handelsblatt has assessed the value of Axel Springer’s holding in Purplebricks.

It claims the publishing brand, which is the largest shareholder in Purplebricks with a 27% stake through its Aviv Group real estate subsidiary, paid €143m to invest in 2018.

The article said the Purplebricks stock was trading at around £3.60 at the time and “this expensive entry ticket was meant to finance expansion plans in Canada, which never materialised.”

Axel Springer has written off a significant part of its holding in Purplebricks, the article claims by citing company documents.

It said: “When all the related costs and write-downs are accounted for, the value of the holding in Springer’s books currently stands at a half of its original value. 

“The market has lost of confidence is much greater: on Monday the stock traded at 10.5p. On that basis, Springer’s holding is today worth barely €10m.”

The article said: “That Axel Springer has had little joy from its investment in online property portal Purplebricks for a long time, is logical given from the massive fall in the share price. Since Springer bought into the company five years ago, the market cap has gone down by 97%. Now Europe’s biggest publisher is facing the threat of management turmoil.”

Despite the management turmoil and calls from activist shareholder Lecram Holdings for Purplebricks to replace its chairman Paul Pindar with Harry Hill, the newspaper reports that Axel Springer is giving the current board time to turn things around.

A spokesperson for Axel Springer told Estate Agent Today: "We consider it essential that the board of directors, which enjoys our full support, can focus on its work to turn Purplebricks around and return it to profitable growth."

It comes as Purplebricks' share price hit a new low of 10p at the close of trading yesterday.

The share price fell to 9.8p during trading and is now down almost 58% so far this year.

> Read the full article here (in German)