AIM-listed property portal OnTheMarket PLC (AIM:OTMP) has published the official scheme documents for its agreed takeover by US real estate firm CoStar, laying out the specifics of the 110p-per-share acquisition.
Pending shareholder approval, the cash acquisition would be a premium to OnTheMarket’s £87.6 million market value as of Thursday, 9 November.
OnTheMarket’s board has put its full force behind the takeover, recommending a unanimous vote from existing shareholders.
Though the takeover is expected to go ahead, activist investor Brett Stone has gone on the defensive, labelling the proposed acquisition as “not in the United Kingdom’s national interest”.
“CoStar's opportunistic offer significantly undervalues OnTheMarket and institutional and estate agent shareholders should both VOTE AGAINST CoStar's offer,” Stone wrote in an open letter on Thursday.
His objections are manifold.
Despite the premium, CoStar’s offer “significantly undervalues” OnTheMarket, according to Stone, who noted that the £99 million bid is a mere 2.9-times multiple to OnTheMarket’s trailing 12 months revenues.
“It is not uncommon for portal transactions to happen at a multiple of around 10 times or more,” he contended, while suggesting that CoStar will drive up listing prices at the expense of estate agents.
Stone, who is a former partner at US investment bank Cantor Fitzgerald, has beef with OnTheMarket since he attempted and seemingly failed to take out a £50 million stake in the company.
“Losing agents and their listings devalues OnTheMarket’s offering to consumers,” Stone wrote in July. “My goal is for OnTheMarket and all stakeholders to be better informed and better off.”
OnTheMarket and CoStar have been approached for comment.