A further exchange between Vote No campaigner Graeme Lumsden and OTM chief executive Ian Springett has sought to clarify how ownership of OnTheMarket will break down in the event of a float.
Springett’s answer gives estimated splits, but not the valuation of the company at flotation on which these splits are based. Springett also states in his answer that agents could hold as much as 78% of the new company.
The documentation that agents have received gives a valuation of £200m to £250m, with the share price at float between £4 and £5.
The breakdown given by Springett below is of 17% investors, 14% management and 69% agents, but the valuation on which these percentages are given is not stated.
This is the exchange:
Lumsden: On the vexed question of percentage ownership – noting the online Sunday Telegraph stated 37% and the printed version stated 50% – I made no comment. I only released a text statement, thus avoiding any inaccuracy on my part.
So, as chief executive, your definitive statement, taking into account all share reward parties, what is the actual percentage, Ian?
Springett: As regards the percentages of ownership, these were and are within the presentations to members being conducted.
At IPO, the estimated splits are: investors 17%, management 14%, agents 69% (of this, the estimated percentage in the hands of the board firms is 6.7%).
If we have, prior to IPO, entered into any agreements to bring in new agents as shareholders in return for listing agreements, then the management percentage will reduce and the agents’ percentage will increase.
As you know, it is our strategy to issue substantial further share value to attract key agents as committed listing and paying customers of OTM.
The presentation gave an estimate (subject to many moving parts) of the ownership percentages once this is completed and subject to no share disposals by any party.
They are: investors 12%; management 10%; agents 78%.
Comments (35)
BrandNew… just for clarity, noting that we have very recently corresponded via teai.co.uk ….your comment is from the perspective as an existing Agents Mutual Voting Member and you have a “Finance” background/acumen. When you process the “numbers/percentages” based on the “estimates” provided, your figures provide a different picture from the one given by AM.
Can I ask you as one member to another… will you run your figures/understanding directly past Ian Springett for his comment. That seems entirely logical… the “Percentage” debate is crucial to Members understanding of what they are voting on.
Noting that Ian Springett has responded to all of my emails to date. I am awaiting a reply to my latest.
No truth in the rumour that AM is launching a GPL Wooden Doll with pins provided!
Hi Graeme
Already done but no reply received as of yet.
I received a reply just before10pm last night.
I, and many others look forward to reading Ian’s reply to you as it is useful information for Members who didn’t make The Roadshows etc… a chance to freely ask further questions of Ian & The AM Board, noting that there is no collective AM Forum, so to speak, for members to interact.
Thank to Ros & PIE for this Forum.
Referring to my post above members have to realize that over 99% of all the current mutual members will only own 49.43% of the company !!!!!!!
Vote No – get your vote in the post today. Don’t waste it.
I’m not sure which way this vote will go, however, what is clear to me is that the precise same people who’ve said that they don’t want AM to work and will never advertise on it anyway are the exact same people who are adamantly against the AIP.
Do the Memorandum and Articles of Association cover the position if there was a vote of no confidence in the directors? What do new investors feel about this current situation?
I wonder what deal I could get from Zoopla of I offered to commit to advertise for five years
But doesn’t zoopla and Rightmove have something similar to this already in place but for 1 year as opposed to 5 which is, in part, why they both have an astronomical share price. Imagine if zoopla and RM tied in agents for 5 years, the share price would go through the roof wouldn’t it?
As I posted yesterday, lets simplify the maths based on Ian’s figures.
If 100 shares are issued and management own 14% then for their percentage to drop to 10% another 40 shares need to be issued to make a total of 140 shares. Those 40 new shares are actually 28.57% of the new total. Take 28.57 away from 78 and you end up with 49.43%.
So 50.57% ends up being held by Management, the Board, the Institutions and those new ‘Key’ members, i.e. the Corporates and the On-liners.
Vote No.
If I had signed up for Agent’s mutual I would be feeling devastated to be fair, and count my lucky stars I didn’t. I think the members have grounds to form legal action against the company for misrepresentation.
Members should not be looking to the future, they should be asking themselves how much they have lost in revenue by extracting themselves from one of the two biggest advertising portals in the UK and how can they possibly have faith in an organisation (that they extensively promoted) that has in some cases eroded their market share under a false pretence.
OTM have used these agents and their goodwill to accelerate their business growth under false pretence of being a mutual.
They have used the ‘disruption’ model NOT for the benefit of their members and the industry, but to be the darling company in the eyes of investors, and surprise, surprise they can now point to an ‘untapped’ market share to these investors.
I am surprised if
a) any member of OTM is not boiling with rage
b) think that the current management team who have made such a hash of the company (although all becomes clear when you see the point above) are the best to take the mutual organisation forward in any shape of form
c) think any uplift in their shares will be greater than the amount we will now all be paying portals monthly (whatever portals we decide to list with)
As someone who didn’t join OTM either this is exactly my thoughts.. I would be absolutely livid had this happened to me.
I certainly won’t be buying shares. #TheFoolAndTheirMoneyAreSoonParted
You couldn’t write this as a believable film script.
Overnight this will create a few very happy rich people and a third ‘for profit’ portal….enabling online listers like YOPA to advertise within weeks that they are the only ones to market their properties on all three major portals (unless of course you are happy to pay three portal costs).
How far will £50 million and shares go in raising awareness and giving financial incentives for others to join? RM will just raise their spend to compete.
It is only lots of new property stock that will gain traction with the public…. and that does not need flotation to achieve.
It just needs the unique identifier of mutuality to be maintained and new innovative products (and not premium ones) to be developed for members, with a management team that is fully behind it.
OTM needs to become THE MUTUAL DISRUPTER PORTAL!
The Wolf of Westminster ?
Hang on dont online agents advertise your home on 1000’s of portals already? That’s what adverts say so must be true..
Bless You,
I am currently on a Greek island sussing out the feasibility of that boat business we discussed.
Only problem is we would be up against ‘Puddle Boats’ who undercut everyone by sending people out on the sea on their own with no life jackets and no h&s instruction. They’re not bothered if you drown or not, as long as they get the hire cost and the boat back. They cover their tracks by paying the local reps and hotels to say how good they are, and asking you to post a good review on their website as soon as you get in the boat to set off.
Theres another business called ‘On The Marine’ owned by a local consortium of peole that had high ideals of supplying the boats to members at a good hire rate so they could keep their running costs reasonable and provide a good service to customers, whilst still making a fair living.
Only problem is the business paid an awful lot of money to hire an outside management team to help grow it and attract new member owners all over the island.
This team now wants to raise a massive loan from investors to buy themselves a huge luxury yacht they can tour the island in….telling everyone why they should now join in their luxury yacht business, even though no one will be able to afford the membership, and very few actually want it.
Existing members are being asked to vote for accepting the investors money as ‘luxury yachts is the way to go’ and otherwise the business will fail.
It is clear the outside management team have found a win, win, win scenario for themselves… as whatever happens they get to keep the biggest luxury yacht for themselves and do whatever they want with it.
On the other hand it is the existng member owners who will have to pay the investors whatever they want in return for putting the money in.
Meanwhile many locals around the island were just waiting to be effectively reached out to by the original business… which just didn’t happen…..for whatever reasons the outside management have never explained
They don’t want to join in another luxury yacht business because there are already other ones around that charge them a lot of money.
There was huge opportunity here for a small boat hire business to join in a great little niche collective that could have grown, but unfortunately it is about to be ruined by big business greed.
Strangely feels like a familiar story I’m sure I have heard elsewhere at home.
hahahahaha lololol hahah lolol wait….lol
i love that gospel.. it sounds familiar but i just cant think which companies you are talking about…..
You have also taken something that was beautiful and changed course angel V..
i did not need boats or investment..i just needed simple folk to pay me 80% less for a fishing rod which they would cast from the safety of the shores.
he who goes into the sea will surely be eaten by sharks.
See you in Greece next year my friend. iam getting ready for a long winter with brexit looming, tenants being more aggressive cos we cant charge the muppets, purplebricks still being fed by rightmove and zoopla and the only alternative smashed up on the rocks.
bless you all.
The Agents Mutual Civil War Is Coming To A Head !!
Members Should Be Asking:
How Did It Start?
Was It Necessary?
Who Will Win It?
Who Do The Members Trust To Build The New Empire Which Ever Way The Vote Goes?
Forgive me but a sale to raise £50,000,000 against a value of £250,000,000 would need investors buying 20% so at investment levels of 17% this will fall short!
The rest of the shares don’t draw in any money as they are effectively gifted!!
And what if the markets decide that OTM is worth £150m Ian? Investors then own 33%, right? And what if its £100m, its 50%?
When we signed up, we were told that we would realise our investments by haveing them repaid (loan notes) and through lower fees.
The only way that we now realise our investments is by selling our shares. Who to?! INVESTORS!
So as agents sell their investments it becomes more and more investor owned.
If it works….
The repay on the investment is telling RM to sod off and that monthly saving being a “return”
12 months off Rightmove would be a welcome return for me, off forever will be WOW.
Pointless estimates. Bottom line is, Ian and the rest of the management team should not have millions.
IT’S MEANT TO BE A MUTUAL FOR THE MEMBER AGENTS.
I proudly started my agency almost ten years ago with my mother and have been in this industry for 18 years. A few things I’ve learnt in business, not just agency; respect the people you are in business with, ultimately not everything works out as you’ve planned. So, every now and then, you have to change direction. However, if I was to keep quiet about my change of plans from whomever I was in business with, then how could I expect genuine support moving forward?
Message to Ian. All you simply needed to do was communicate potential options to the members of agents mutual… before making your own choice that benefits only you financially… not force it down our throats and hold us ransom.
Totally agree. If we knew the amount spent on consultants to prepare for this vote I bet we’d be shocked. We should have been consulted before Ian embarked on this self serving plan, spending or portal’s money to make himself millions while creating a portal we don’t want. We’ll have extra products to compete with each other and waste or money on while online agent’s are allowed in to rape and pillage with false claims that they are the same as us only cheaper to damage or margins. Time to vote no and stop this nonsense. I’d rather OTM failed that have three profit led portals that we all feel we have to be on. If we pulled out and all negotiated with Zoopla and rightmove collectively we could get a great deal. If only agents could work together, our buying power and value of our content is immense.
Agree wholeheartedly Mark.
Trust goes both ways, if it doesn’t then any relationship/business etc is undermined from Day 1.
There is an old saying, once bitten twice shy. It happened with Rightmove, we then let zoopla in, don’t let it happen again!
Any agent that votes for this deserves to go out of business due to high portal costs and low online agent fees.
it is absolutely clear that the only people who are going to win out of this is Mr Springett and a few other anonymous agents that will be able to retire soon.
Please don’t look back at this comment and say ‘curious George told us this would happen’
technically agents have created a new saying: 3 times bitten still stupid.
CG if OTM fails, RM and Zoopla will systematically destroy our industry. I don’t really care how much Springiest or anyone else at OTM might make. But what I do care about is protecting the industry’s ar*e. And what iIsee as the FUNDAMENTAL FLAW in the floatation proposal, is letting on liners into the deal. That is just pulling the trigger on both barrels and shooting the industry in both feet. If it wasn’t for that I would vote yes to the flotation. But it’s a big issue for me right now,so I have not voted yet.
I suspect a lot to do with ‘letting the onliners on’ is to do with creating a huge marketing platform for YOPA to use to vastly increase its scope, brand awareness and yes … you’ve guessed it SHARE VALUE.
Don’t some existing members and management have a vested interest in YOPA?
Does not matter the percentage split. With outside investment the board need to continually improves profits.
They have already come out and said they will be pushing products and have at least an annual 5% rate increase.
What more evidence do you need?
I get that smile but I think we both agree OTM is history if it stays as is. So the question for me was simply did I want a portal where independent agents owned at least the majority and MAY of had some leverage or Rightmove where we owned and controlled nothing.
Not true.
1. This will not keep RM in check has it up to this point? No. You will just have 3 portals trying to milk as much as possible out of you.
2. It can work. It is obvious this was the plan from the start. This is why reps have been absent. It is why we have had no advertising. It is why restrictions were put in place. Change the board to real agents who are not interested to milk OTM. That is the best chance.
Things need to change at OTM to succeed but floating is not the answer.
I asked yesterday Real agent why is it history if this doesnt go ahead ? A better way of putting the question , what parts of the plan cannot be adopted without IPO except handing over c30% of the company to management and investors for £50Million return from outside investment . If you think this is a good deal here is Ian Springetts valuation in his own words during his meeting with countrywide,connells and LSL in early 2016 10B …. “potential market cap could reach several £bn ,why not own it ” ? direct word for word quote from documentation submitted to court. So he either thinks it could reach several £bn if he owns some of it or it will fail ? I think the question that you have to answer is “Is being told the company might fail without an IPO just a scare tactic to hand over a load of very cheap value shares?”
Its fascinating how you are now suddenly the supporter danny?!!
OTM will be history because as much as I hoped it wouldn’t membership stalled, yes I accept there may have been reasons, but Smile by your own stats you were producing the rise in agents joining was anything but meteoric, so how long before it EVER offered a credible alternative to RM….10 years, 15 years??
In the meantime RM outguns it, out spends it as do Zoopla and so the public would take forever to get hold of it.
OTM could have worked but the reality is it now I dont believe will. I have a number of misgivings about this IPO but what I do feel is that the only way OTM now stays in the game is to raise money, and to be frank I can’t see that coming from agents directly.
Agin with regard to your first point smile, without a successful OTM you will still have two portals milking your cash and unchecked how long do you think it will be before Rightmove or Zoopla or possibly both start charging per property?? Without a COMPETING OTM I would say two years tops.
See my post below.
Independent Agents will apparently based on IS’s own figures NOT own a majority.