OnTheMarket, the online property portal fighting a fierce battle with rivals Zoopla and Rightmove, is to lift the veil on secret plans to demutualise and list its shares in a bumper stock market flotation.
Sky News has learnt that Agents’ Mutual, the parent company of OnTheMarket, will announce on Friday a radical plan to overhaul its corporate structure and raise £50m to back its expansion.
City sources said on Thursday that Zeus Capital, the investment bank, had been appointed to work on the listing.
Launched in 2015, OnTheMarket has rapidly gained market share in the cut-throat estate agency market, signing up thousands of agents across Britain.
The business is currently owned by its members, which include giant names from the property industry such as Savills, Chestertons and Knight Frank.
A source said that OnTheMarket would seek funds from institutional investors as part of a flotation that has been earmarked for the coming months.
Existing shareholders – the estate agents – will first need to vote in favour of the demutualisation plan.
Assuming it goes ahead, the cash will be ploughed into accelerating the expansion and marketing of OnTheMarket’s operations, according to one industry insider.
Its aim is to challenge the “duopoly of Rightmove and Zoopla” by having sufficient firepower to attract and retain more estate agents, and grow traffic on its site, they added.
The existing shareholders will retain a majority of the portal’s shares, aligning them with its future performance, according to the source.
OnTheMarket has roughly 5,700 estate agents and letting agents on its portal – still a long way behind the numbers posted by Zoopla and Rightmove but now with roughly a one-third share of the portal market.
Formed in January 2013, OnTheMarket charges agents a monthly fee but is pursuing what insiders call a price disruption strategy aimed at positioning it as better value than its two older competitors.
The newcomer’s arrival has provoked a bitter conflict between them, which deepened when OnTheMarket decreed that estate agents listing on its site could only opt for one additional listing with either of its rivals.
That rule prompted a legal claim brought by Gascoigne Halman, an independent agent, but it was resolved by the Competition Appeal Tribunal last month in OnTheMarket’s favour.
Ian Springett, OnTheMarket’s chief executive, said after the ruling that Agents’ Mutual’s strategy had been judged to be “pro-competitive both in object and effect”.
Doubts have continued to be raised by OnTheMarket’s rivals about its prospects, with Alex Chesterman, the chief executive of Zoopla’s parent, describing it as “a failed experiment”.
Some City analysts have, though, forecast that OnTheMarket will provide stiff long-term competition.
A spokesman for Agents’ Mutual declined to comment on Thursday.
Source: Sky