British online estate agent Purplebricks, once valued at more than $1 billion, said it had agreed to be bought by smaller rival Strike for just one pound ($1.26).
Under the deal, Strike will assume the liabilities of Purplebricks, which put itself up for sale in March and sped up the process last week after warning it was bleeding cash.
Purplebricks grew rapidly after launching in 2014, but has faced more than a year of problems after COVID-19 that have wiped out nearly all of its stock price gains.
Its shares, which at their peak in mid-2017 traded at over 500 pence each, were down 42.7% to 0.7 pence at 1042 GMT.
Strike, formerly Housesimple, is backed by Carphone Warehouse founder and TalkTalk director Charles Dunstone. Last week, Strike said it did not intend to make an offer, but remained in talks with Purplebricks over buying its assets.
Purplebricks underwent at least three major management shake-ups in 2022 as Britain’s property sector cooled as higher borrowing costs and lower mortgage approvals hit demand.
After a series of failed international expansion efforts, Purplebricks changed its business model in 2021 by making its sales agents permanent employees and removed a pricing scheme that failed to lift new housing instructions.
Purplebricks, which said it had liabilities of about 33 million pounds as of Oct. 31, expects net cash proceeds of about 2 million pounds ($2.5 million) from the sale to Strike.
The AIM-listed company has posted an annual loss in every year but one since its fiscal year 2015.
Purplebricks Chairman Paul Pindar said in a statement he was “disappointed with the financial value outcome”.
“However, there was no other proposal or offer which provided a better return for shareholders, with the same certainty of funding and speed of delivery necessary to provide the stability the company needs,” Pindar added.
Source: Reuters.com