CoStar has defended its operations after a third open letter from OnTheMarket critic Brett Stone attempted to derail the US property giant’s takeover the portal.
Stone issued an open letter yesterday that highlighted old articles about the working environment at CoStar and suggested agents would see their fees raised as a result of the proposed takeover.
He urged agents to vote against the deal, claiming agents aren’t getting a fair price for their shares and that “no deal is better than a bad deal.”
Estate Agent Today received the contents of the letter at the same time as other trade titles but decided against publishing it yesterday so that all parties mentioned could receive a right of reply.
A spokesperson for CoStar told Estate Agent Today: “CoStar has a positive and inclusive working environment evidenced by our strong hiring and retention figures and employee engagement scores. In the first half of the year, we made 600 new hires and have a target of 1,300 new positions in 2023.
“CoStar’s average monthly employee retention rate grew to 99.1% during the first six months of 2023, up from 98.4% last year and average tenure at CoStar Group is currently 4.4 years compared with 3.7 years in the rest of the private sector.
“This is supported by investment in development of CoStar employee’s personal and professional skillsets, and we offer over 450 internal development courses and more than 8,000 via LinkedIn Learning. We also have strong internal mobility with 526 employees, equating to nearly 10% of the workforce, having been promoted in the first half of the year, contributing to our great culture.
“CoStar has been placed on Forbes’ 100 Most Innovative Growth Companies in the World, Forbes’ Fast Tech 25 and Fortune’s 100 Fastest Growing Companies.”
The statement adds that its founder and chief executive Andy Florance has been recognised as an industry leader and was recently named as Globee Visionary Leader of the Year and Globee CEO of the Year.
OTM also rejected Stone’s claims that the deal undervalues the portal and that it is it is likely to result in significantly higher total portal costs for UK estate agents.
A spokesperson for OTM said the offer price is at a 93.7% premium to the average market price in the three months prior to deal announcement.
The spokesperson said: “Partnering with CoStar will significantly accelerate our strategy with the clear target of delivering what agents want – the ability to have a real choice on which portal to list with. Furthermore, CoStar has committed to fair and sustainable pricing and intends to continue charging agents a small proportion of Rightmove’s current charges.
“CoStar will bring industry-leading global expertise and significant financial firepower to invest in OnTheMarket, allowing us to accelerate our transformation of the sector. We have strong shared values in our commitment to agents who we believe will benefit from unparalleled value and greater opportunities to enhance their businesses."
Stone, founder of Trunkstone, a new long-term holding company focused on the property commerce category and the managing partner of private investment partnership Edengen, has previously issued open letters questioning OTM’s management.
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.
A spokesperson for Stone was unable to comment when asked what financial backing he had.