Today is likely to see the final step in the demutualisation process of Agents’ Mutual – although the outcome of the sanction court is by no means certain since the court has proved in the past that it is not a rubber-stamping process.
However, if it does approve the new scheme of arrangement – for which there was an 89% Yes vote by members last week – the new regime is likely to come into force tomorrow, clearing the way for a stock market float.
Agents’ Mutual members have been able to register their objections with the Sanctions Court, and Vote No campaigner Graeme Lumsden has done just that.
He is asking the Court to look at executive management contracts entered into by the board of Agents’ Mutual in early 2013, which were apparently updated in September 2016, nearly 12 months before the IPO proposals. He said that these contracts, which incentivised the senior management team, were never discussed or ratified by members.
“In addition, members have not seen these contracts because they are deemed to be confidential.”
Lumsden adds: “We note that some mutual members (notwithstanding that they are members of the board) are aware of the contents yet will not allow the other members the same benefits.”
Lumsden also objects to the float plan saying that at the roadshow he attended, no alternative was put on the table: “The proposal was simply put forward as ‘float or fail’. No previous consultation with members had taken place.”
Lumsden attacks the speed and timing of the announcement and subsequent vote. Lumsden also queries the percentage of the overall membership which would have control of the company in the event of a float.
Lumsden’s objections can be found here: http://theestateagencyindustry.co.uk/
Meanwhile another City analyst has reported his views on the OnTheMarket vote, which is set to allow it to raise £50m via a stock market flotation.
William Packer, of Exane BNP Paribas, said in a note to investors that his firm was “broadly neutral”.
Packer said: “A vote in favour of the launch of the IPO was expected following the strong backing of management and the board.
“We view a successful execution of an IPO as more difficult for a third portal with lagging traffic and inventory, and powerful incumbents.
“In our view, critical to Agents Mutual’s success is attracting more agents to the platform as soon as possible (with unique or semi-unique inventory more valuable) and a boost to traffic numbers reliant on improved inventory and higher marketing spend (likely through the money raised at IPO).”
Exane rates Rightmove shares as outperform, and ZPG as neutral.
Packer’s note to investors follows comments from Anthony Codling, of Jefferies, which advises Zoopla. Codling said he did not think an unmutual OnTheMarket would be more successful than the mutual version.