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OnTheMarket rejects ‘detrimental’ approach from investor

OnTheMarket (OTM) has rebuffed a surprise approach from a non-shareholder in the business to overhaul the brand and let him join the management team.

Brett Stone, a partner at private investment partnership Edengen and previously held senior roles at US financial firm Cantor Fitzgerald, issued an open letter to OTM shareholders this week that suggested the portal’s board was refusing to meet and discuss attempts to improve the business.

The letter, posted on LinkedIn, suggested OTM’s board had underinvested in the brand and that it had underperformed compared with rivals and wasn’t supporting agents. 


His suggestions include capping member listing fees in perpuity, investing in new products and raising staff wages by 10% while retaining chief executive Jason Tebb and Christopher Bell as non-executive chairman.

He said he would join OTM’s management team full-time, in a strategy and business development role, after completion of an investment. 

Stone added: “My proposal had something for everyone, disadvantaged no one and benefited all stakeholders, in my considered opinion.”

But a spokesperson for OTM said: “The board of OnTheMarket received a letter from Brett Stone in late 2022 and, after careful consideration, unanimously agreed his proposal was detrimental to stakeholders. 

“Stone is not a shareholder in OnTheMarket, did not provide any evidence of shareholder support for his proposal or any details of any available funding.

“The board consider that OnTheMarket has strong prospects as an independent business, as evidenced by our recent trading update which showed record revenues and profitability, alongside on-going strategic progress. 

“The board also place great value on OnTheMarket’s majority agent owned shareholder structure and believe that this continues to benefit all of the Company’s stakeholders and the property market as a whole.”

Estate Agent Today yesterday asked Stone about his experience in the UK property sector.

During his time at Cantor Fitzgerald from 2001 to 2017, one of its companies acquired commercial real estate broker Newmark, which listed on Nasdaq and in 2021 generated revenue of $2.9bn.

Stone said: “OnTheMarket is a classifieds, advertising, information and digital media company far more than it is a ‘property market’ company. The estate agents are and always will be the experienced property market experts.

“What my partners and I do is solve problems, build teams and provide capital to help others develop great companies and products, which they take all the credit for.

“If I were to invest in OTM, which is far from certain given its issues, it would be OTM’s chief executive that would be responsible for overseeing its development and growth.”

It comes as a lock-in period for agent shareholders ends on 9 February 2023, five years after the portal’s public listing.

OTM has created a facility for a one-off sale of shares, without which it is claimed that “the market price achievable by selling agent shareholders may be impacted.”

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    Agents and shareholders can now decide if they think the offer was “detrimental to stakeholders”. New capital to and a commitment to:
    1. cap member listing fees at a fair level in perpetuity;
    2. retain and improve members’ influence;
    3. increase spending on marketing and agent onboarding;
    4. invest in new products and services that benefit members and members’ customers;
    5. hire additional talent with digital product and marketplace expertise;
    6. keep OTM listed for all shareholders to be able to buy and sell shares at will;
    7. keep OTM listed for all shareholders to benefit from future value created;
    8. provide an opportunity for members and shareholders to invest more capital if they choose;
    9. buy back shares from shareholders who require liquidity; and
    10. raise all employees’ wages by 10%;

    Kristjan Byfield

    Brett, if you feel so passionate about this vision and opportunity, why aren't you going the traditional route with plc of acquiring enough shares to have an actual say in proceedings?
    Your plans generally involve a lot of spending proposals, all of which need quantifying and to be paid for. This looks like a pretty standard approach of growing a business aggressively whilst simultaneously accruing a lot of debt, which typically leads to an early exit by the instigators of such a strategy, realising an increased share price through greater revenue (NOT profit) - but leaving the business facing an, often, insurmountable debt burden.

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    “record revenues and profitability” if total agents using OTM is declining and share of consumer traffic is declining (which they have been over the last 18 months of reported numbers), does not benefit shareholders, members or members’ customers.

    The current plan under Bell’s leadership of the board is killing OTM and is a fast-track to failure.

    It only benefits Tebb and Bell in the short-term and Rightmove in the long-term.

    Bell was previously chief executive officer of Ladbrokes from February 2006 to May 2010.

    The Guardian reported that Bell’s resignation was the result of institutional shareholders requiring change due to disappointing performance.

    After Bell left, the new chairman (Peter Erskine) said Ladbrokes had: “fallen behind the competition in areas such as technology and digital marketing”, and

    The new chief executive officer (Richard Glynn) found a:
     “lack of strategic direction, underinvestment and a siloed approach to doing business that was holding the Company back”.

    The same is happening at OTM in my opinion.

  • London Agent

    In the current market many agents are looking at saving costs.
    Is there any need to keep advertising on three portals? Unlikely IMHO.
    We have pulled the plug on OTM and happy to stay with the two market leaders.
    The number of leads from Rightmove and Zoopla in the past twelve months dwarfs what we have from OTM. In the past 12 moths their share price is down 28% and down 48% (since floating).
    Like PrimeLocation before, agents bought into a business plan.
    With the lock in period ending on the 9th February, many will be watching the share price with intrest.


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