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What now for the OTM IPO?

Who says things slow down before Christmas? The opposite appears to be the case, at least when it comes to the ongoing OnTheMarket (OTM) saga. 

Having just read the news flash confirming that Connells has won the right to appeal the crucial decision in the Gascoigne Halman case, I can’t help but wonder what effect this development will have on investors considering participating in OTM’s upcoming IPO.

OTM’s triumph in the original case was in my view absolutely critical to its future. If the case had gone the other way, not only would there have been the legal costs to consider but the very damaging, or more likely devastating effect on its business model. 


I have bought several businesses in my time and one of the basic areas of due diligence I look at is to examine and evaluate any legal threat that may exist. As a rule of thumb, I would be very concerned if I found out there was a serious and ongoing legal threat that could affect the value of my investment 

Of course, there is no guarantee that Connells will appeal but the fact is they could and they have very deep pockets. If they choose to do so and even if OTM eventually wins, it will all take time and resources, as did the original case, time and resources that OTM have said distracted them from their mission. It therefore follows that any new case would probably have the same effect, to distract OTM from their mission and lessen their chances of achieving their goals.

Only time will tell if this significant turn of events will disrupt the IPO, something that could happen if investors catch fright by this news. Even without this news, the IPO hasn’t exactly attracted universal praise or support. 

Some would say there is an element of karma at work here. There are many disillusioned agents out there not looking forward to their portal going public, becoming a profit-focused business, inviting online agents to list and offering more attractive terms to new members than to founders. 

Certainly, it’s not the Christmas present the board of OTM would have been looking for but it may be the one they deserve.

*Simon Shinerock is Chairman of Choices Estate Agents. For more information on Simon, see his blog or his LinkedIn profile.


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