A would-be activist has penned a second letter to shareholders of OnTheMarket Plc, launching a scathing attack on the running of the property search portal and its decision to snub his investment bid.
(Bloomberg) — A would-be activist has penned a second letter to shareholders of OnTheMarket Plc, launching a scathing attack on the running of the property search portal and its decision to snub his investment bid.
Brett Stone, a former partner at US investment bank Cantor Fitzgerald LP who now runs his own holding company, told Bloomberg News that he offered to invest more than £50 million ($64.3 million) in new shares last year, but had his proposal rejected. Stone — who says the firm’s failure to retain customers is diluting stakeholders and gifting market share to rivals Rightmove Plc and Zoopla Ltd. — is now ramping up his approach with a follow-up letter.
“Losing agents and their listings devalues OnTheMarket’s offering to consumers,” Stone wrote in a letter to shareholders on Monday, which was seen by Bloomberg News. “My goal is for OnTheMarket and all stakeholders to be better informed and better off.”
OnTheMarket told Bloomberg News that Stone gave no evidence of shareholder support during deliberations at the end of last year, and that he provided no details of available funding. The company — which is hosting its annual general meeting on Monday — did not immediately respond to a request for comment on the latest approach.
Rightmove Dominance
Rightmove is about 50% larger than OnTheMarket when it comes to listings, according to a Bloomberg Intelligence report published in May. The story is similar when looking at the amount of time a consumer spends on the website and the number of page views, the report added.
OnTheMarket has attempted to dent Rightmove and Zoopla’s dominance by offering services to agents for reduced or zero fees on long contracts, as well as issuing them equity. However, the company’s share price has plunged about 50% in the last 18 months, and website visits declined 14% year-on-year in 2022.
Read more: New Entrants Haven’t Dented Rightmove’s Lead
Stone told Bloomberg News that the aim of his approach was to become a long-term committed shareholder, insisting he had no intention of taking the company private. He said that all shareholders should have the opportunity to vote on his proposals, which include capping estate agents’ listings fees and increasing wages for all employees.
“OnTheMarket needs significant investment in its products, teams and business to have a reasonable chance of success,” Stone wrote in the letter. “Without these things it will keep destroying value.”
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