Propertyfinder.com management mulls MBO amid group review
The management board of Propertyfinder.com is mulling an MBO as its parent company, REA Group, reviews its UK operations.
REA Group announced plans to review the portal as part of a review of its UK operations in a statement issued yesterday. It says it will consider various options, including possible closure of all or part of the business, which also encompasses hotproperty.co.uk and ukpropertyshop.co.uk.
Speaking exclusively to The Negotiator, Nick Leeming, major client director at Propertyfinder.com, says there is a range of options for the future of the portal, including external investment and acquisition, but adds that various members of the management board, including himself and Gillian Kent, chief executive of the portal, are in the throes of discussions about an MBO.
He says: “We are progressing this option, but we are talking about months rather than a matter of weeks; this is not something that gets resolved over night.”
He adds that the portal is currently trading at a loss, in line with its growth strategy.
Commenting on REA’s announcement, Alex Chesterman, chief executive of Zoopla.co.uk says: "It is not entirely surprising that REA Group are reviewing their UK operations. The business of online property marketing is changing rapidly and the subscription-based models such as Propertyfinder.com do not align the interests of the portal and the agent customers in the same way as performance-based models.
“We are likely to see more consolidation or closures in the market as more and more agents shift their marketing spend away from subscription portals to models where they can track, measure and ultimately only pay for the results they get."
Leeming says: “That is interesting, given that the UK’s top portals are all subscription-based models, based on consumer traffic. While free offerings are an attractive offering, they don’t yet have the ability to attract consumers in great numbers."
Nevertheless, Leeming says he will consider whether to retain a subscription-based model for Propertyfinder.com if the MBO is successful.
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