REG - CoStar Group, Inc. OnTheMarket plc - Offer for OnTheMarket plc
19/10/2023 07:15
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20231019:nRSS6112Qa&default-theme=true
RNS Number : 6112Q CoStar Group, Inc. 19 October 2023
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
( )
19 October 2023
RECOMMENDED ACQUISITION
of
ONTHEMARKET PLC
by
COSTAR UK LIMITED
(a wholly-owned indirect subsidiary of CoStar Group, Inc.)
to be effected by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006
Summary
· The board of directors of CoStar UK Limited ("Bidco"), a
wholly-owned indirect subsidiary of CoStar Group, Inc. ("CoStar"), and the
board of directors of OnTheMarket plc ("OnTheMarket") are pleased to announce
that they have reached agreement on the terms of a recommended cash offer to
be made by Bidco for the entire issued and to be issued share capital of
OnTheMarket (the "Acquisition").
· Under the terms of the Acquisition, each OnTheMarket
Shareholder will be entitled to receive:
110 pence in cash for each OnTheMarket Share held
· The Acquisition values the entire issued and to be issued
ordinary share capital of OnTheMarket at approximately £99 million and
represents a premium of approximately:
- 56.0 per cent. to the Closing Price of 70.50 pence per
OnTheMarket Share on 18 October 2023 (being the last Business Day prior to the
Announcement Date (the "Last Practicable Date"));
- 93.7 per cent. to 56.79 pence, being the three-month
Volume Weighted Average Price to the Last Practicable Date; and
- 37.5 per cent. to 80.00 pence, being the 52 week high
Closing Price per OnTheMarket Share to the Last Practicable Date.
· At the Announcement Date, the Acquisition has the support
of 29.51 per cent. of OnTheMarket's share capital, which includes its six
largest shareholders as further detailed below.
· The terms of OnTheMarket Agent Share Incentive Listing
Contracts contain discretionary equity incentive terms, which shall continue
to be honoured following the Acquisition becoming Effective with a cash
payment in lieu of discretionary equity issuance. It is expected that
discretion to issue incentive awards under such contracts will be exercised in
line with past practice. Following completion of the Acquisition, any
OnTheMarket Shares which are issued at the discretion of OnTheMarket pursuant
to the terms of the OnTheMarket Agent Share Incentive Listing Contracts will
be automatically transferred to Bidco under the terms of the Amended
OnTheMarket Articles, in consideration for, and conditional on, the payment to
such agent of an amount in cash equal to the consideration that the agent
would have been entitled to under the Acquisition had such share been a Scheme
Share.
Background to and reasons for the Acquisition
· Bidco and CoStar believe that the Acquisition represents
an attractive strategic entry point for CoStar into the UK residential
property market. CoStar has invested billions of dollars into building the
world's leading online property marketplaces, generating hundreds of millions
of leads, resulting in millions of successful commercial and residential
property transactions for its clients. CoStar's websites attracted
approximately 280 million visits in September 2023, and include Homes.com, the
agent-friendly, second largest and fastest growing residential marketplace in
the United States.
· OnTheMarket is an asset with an established and
differentiated position within the UK market. Its digital platform has strong
customer relationships and robust traffic flow that will allow CoStar to
continue to accelerate its own international expansion efforts across the UK
and Europe.
· OnTheMarket's founding and continued ownership by estate
agents - its customers - has developed a loyal, recurring base of agents that
list on the platform. This has led its advertiser count to nearly triple from
approximately 4,600 in 2015 to over 13,000 today. Strong agent relationships
and listings attract serious property seekers, with OnTheMarket delivering a
6.8 per cent. conversion ratio of leads to website visitors.
· OnTheMarket's network of property professionals and
breadth of advertiser relationships provide a strong foundation to compete
with the dominant UK property portals and support the growth of its related
software solutions and data insights. Whilst currently garnering under 10 per
cent. of wallet share in its defined digital portals space, OnTheMarket has a
much larger portion of listings and market coverage than its market share and
financial footprint suggest.
· The combination of OnTheMarket's large network of agents
and access to listings with CoStar's fortress balance sheet and strengths as a
leasing commercial property site and the strength of the platform of
Homes.com, the leading US residential portal, seeks to create the number one
agent-friendly UK residential property portal and a genuine disruptor to the
established market leaders. The Acquisition will be an important step in the
expansion of CoStar's Homes.com residential network not only in the UK, but
across Europe.
Recommendation
· The OnTheMarket Directors, who have been so advised by Zeus as to the
financial terms of the Acquisition, consider the terms of the Acquisition to
be fair and reasonable. In providing advice to the OnTheMarket Directors, Zeus
has taken into account the commercial assessments of the OnTheMarket
Directors. Zeus is providing independent financial advice to the OnTheMarket
Directors for the purposes of Rule 3 of the Code.
· Accordingly, the OnTheMarket Directors intend to recommend
unanimously that Scheme Shareholders vote (or procure the voting) in favour of
the Scheme at the Court Meeting and that OnTheMarket Shareholders vote (or
procure the voting) in favour of the Resolution(s) at the General Meeting (or,
if Bidco exercises its right to implement the Acquisition by way of a Takeover
Offer, to accept, or procure the acceptance of, such Takeover Offer), as each
OnTheMarket Director holding OnTheMarket Shares has irrevocably undertaken to
do in respect of their own beneficial holdings, amounting, in aggregate, to
185,625 OnTheMarket Shares (representing, in aggregate, approximately 0.23 per
cent. of the OnTheMarket Shares in issue on the Last Practicable Date).
OnTheMarket Shareholder support: Irrevocable undertakings and letters of
intent
· In addition to the irrevocable undertakings from the OnTheMarket
Directors referred to above, Bidco has also received irrevocable undertakings
to vote (or procure the voting) in favour of the Scheme at the Court Meeting
and Resolution(s) at the General Meeting (or, if Bidco exercises its right to
implement the Acquisition by way of a Takeover Offer, to accept, or procure
the acceptance of, such Takeover Offer) from Downing, Harwood, Jason Walker
and Spicerhaart Group Limited in respect of 15,598,651 OnTheMarket Shares
(representing, in aggregate, approximately 19.45 per cent. of the OnTheMarket
Shares in issue on the Last Practicable Date).
· In addition to the irrevocable undertakings from the OnTheMarket
Directors and the irrevocable undertakings referred to above, Bidco has
received letters of intent to vote (or procure the voting) in favour of the
Scheme at the Court Meeting and the Resolution(s) at the General Meeting (or,
if Bidco exercises its right to implement the Acquisition by way of a Takeover
Offer, to accept, or procure the acceptance of, such Takeover Offer) from
Herald Investment Management Limited and Schroder Investment Management
Limited in respect of 7,881,646 OnTheMarket Shares (representing, in
aggregate, approximately 9.83 per cent. of the OnTheMarket Shares in issue on
the Last Practicable Date).
· In total therefore, Bidco has received irrevocable undertakings and
letters of intent in respect of 23,665,922 OnTheMarket Shares (representing,
in aggregate, approximately 29.51 per cent. of the OnTheMarket Shares in issue
on the Last Practicable Date).
· CoStar and OnTheMarket are pleased to confirm that this includes
irrevocable undertakings and letters of intent from each of OnTheMarket's six
largest shareholders.
· Full details of the irrevocable undertakings and letters of intent
received by Bidco are set out in Appendix III to this Announcement.
Information on OnTheMarket
· OnTheMarket (AIM: OTMP) is a leading UK residential
property portal provider, admitted to trading on AIM.
· It has extensive knowledge of, and expertise in, the UK
residential property market and is the operator of the OnTheMarket.com
property portal.
· Since 2015, OnTheMarket has been working to disrupt the
market with its unique agent-friendly model. The OnTheMarket.com property
portal has seen rapid growth and OnTheMarket has expanded its base of estate
and letting agents.
· OnTheMarket's objective is to create value for
shareholders and property advertiser customers by delivering an agent-backed,
tech-enabled portal, offering a first-class service to agents and new homes
developers at fair and sustainable prices, with the mission to become the
go-to portal for serious property seekers. It is currently the third most
visited residential property portal in the United Kingdom.
· OnTheMarket's website and apps provide potential buyers,
sellers, landlords and tenants with a differentiated and innovative property
search experience. Its service concentrates on presenting hundreds of
thousands of homes for sale or rent, from thousands of estate and letting
agents or new home developers at all price points across the UK. Its search
services include Farms, Estates and Land, Student, Commercial, Overseas and
Retirement.
· OnTheMarket also aims to support its agents in providing
a superior service to their clients by providing a number of value-adding
services to increase the profitability of their own businesses. Many agent
customers choose to launch thousands of their newly instructed UK residential
properties exclusively with OnTheMarket first, 24 hours or more ahead of
advertising them on other property portals, and these are prominently featured
as 'Only With Us'.
Information on Bidco and CoStar
· Bidco is a private limited company incorporated in
England and Wales and is an indirect wholly-owned subsidiary of CoStar. Bidco
is the primary operating and contracting entity for CoStar's business outside
the United States. Further details in relation to Bidco will be contained in
the Scheme Document.
· CoStar (NASDAQ: CSGP) is a leading provider of online
real estate marketplaces, information and analytics in the property markets.
Founded in 1987, CoStar conducts expansive, ongoing research to produce and
maintain the largest and most comprehensive database of real estate
information. CoStar has invested billions of dollars into building the world's
leading online property marketplaces, generating hundreds of millions of leads
resulting in millions of successful commercial and residential property
transactions for its clients. CoStar's websites attracted approximately 280
million visits in September 2023, and include Homes.com, the agent-friendly,
second largest and fastest growing residential marketplace in the United
States. CoStar's brands also include LoopNet.com, the number one commercial
property marketplace and Apartments.com, the number one apartment marketing
site in the United States.
· Headquartered in Washington, DC, CoStar maintains offices
throughout the United States, Europe, Canada and Asia with aover 5,600
employees globally. CoStar is listed on the NASDAQ with a market
capitalisation of approximately $33 billion and is a member of the NASDAQ 100
and S&P 500.
· CoStar has a long-standing presence and history of
investment in the United Kingdom and has recently expanded further through the
launch of LoopNet, the world's largest commercial property marketplace, in the
UK market. Additionally, through its investments in BureauxLocaux and Business
Immo in France, Thomas Daily in Germany and Belbex in Spain, CoStar is rapidly
growing its presence in continental Europe.
General
· If any dividend and/or distribution and/or other return
of capital or value is authorised, announced, declared, made or paid or
becomes payable in respect of the OnTheMarket Shares on or after the
Announcement Date and with a record date prior to the Effective Date, Bidco
reserves the right to reduce the consideration payable under the Acquisition
in respect of each OnTheMarket Share by the aggregate amount of all or part of
any such dividend and/or other distribution and/or other return of capital or
value, except where OnTheMarket Shares are or will be acquired pursuant to the
Acquisition on a basis which entitles Bidco to receive such dividend and/or
other distribution and/or other return of capital or value, provided that, to
the extent such dividend and/or other distribution and/or other return of
capital or value is cancelled, the consideration shall not be subject to
change. If Bidco exercises its right or makes such a reduction in respect of a
dividend and/or other distribution and/or other return of capital or value,
OnTheMarket Shareholders will be entitled to receive and retain such dividend
and/or other distribution and/or other return of capital or value.
· It is intended that the Acquisition be implemented by way
of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act
(although Bidco reserves the right to effect the Acquisition by way of a
Takeover Offer, with the consent of the Takeover Panel). The purpose of the
Scheme is to provide for Bidco to become the owner of the whole of the issued
and to be issued ordinary share capital of OnTheMarket.
· The Acquisition is subject to the Conditions and certain
further terms set out in Appendix I and to the full terms and conditions which
will be set out in the Scheme Document. The Conditions include:
· the approval by a majority in number of Scheme
Shareholders present, entitled to vote and voting at the Court Meeting, either
in person or by proxy, representing at least 75 per cent. in value of the
Scheme Shares voted;
· the approval of the Resolution(s) by the requisite
majority or majorities of OnTheMarket Shareholders at the General Meeting;
· the sanction of the Scheme by the Court; and
· the Scheme becoming Effective by no later than the Long
Stop Date.
· It is expected that the Scheme Document, containing
further information about the Acquisition and notices of the Court Meeting and
General Meeting, together with associated Forms of Proxy, will be published
within 28 days of this Announcement (or such later time as may be agreed by
the Takeover Panel) and the Court Meeting and the General Meeting are each
expected to be held as soon as possible thereafter, giving the required notice
for such meetings.
· The Scheme is currently expected to become Effective
during Q4 2023, subject to the satisfaction or (where applicable) waiver of
the Conditions. An expected timetable of key events relating to the
Acquisition will be provided in the Scheme Document.
Commenting on the Acquisition, Andy Florance, Founder and Chief Executive
Officer of CoStar, said:
"We believe the acquisition of OnTheMarket represents an attractive and
efficient entry point for CoStar into the estimated £8 trillion United
Kingdom residential property market. We are excited to welcome the OnTheMarket
team to the CoStar family.
OnTheMarket was founded by agents with the mission to provide a competitive
alternative to the existing property portals in the United Kingdom.
OnTheMarket has successfully developed a large network of agents and access to
property listings by taking an agent-friendly approach and providing high
intent leads at a fraction of the cost of the dominant players in the market.
CoStar has a strong track record of acquiring, investing in and building
online property marketplaces into leading positions, including LoopNet,
Apartments.com, and most recently Homes.com. With Homes.com online traffic of
approximately six million monthly unique visitors at acquisition, we invested
aggressively in content, technology and marketing and, in the past year,
monthly unique visitors have surged more than 1,200 per cent. to reach over
100 million monthly unique visitors in September 2023 according to Google
Analytics, generating millions of leads directly to agents.
We are excited to combine CoStar's resources and leading marketplace
experience with OnTheMarket's agent-focused culture to create a leading player
in the United Kingdom marketplace and provide increased choice and higher
quality offerings for consumers."
Commenting on the Acquisition, Chris Bell, Chairman of OnTheMarket, said:
"Since being formed in 2013, OnTheMarket has achieved its founding mission by
building a market-leading property portal committed to agents, while at the
same time developing into a differentiated, technology-enabled property
business. The offer from CoStar recognises the quality of OnTheMarket and the
significant potential of the business, while offering shareholders an
attractive opportunity to realise their investment at a substantial premium to
the prevailing share price."
Commenting on the Acquisition, Jason Tebb, Chief Executive Officer of
OnTheMarket, said:
"From a position of strength, partnering with CoStar will significantly
accelerate our strategy with the clear target of becoming the market leader,
whilst staying committed to fair and sustainable pricing. CoStar will bring
industry-leading global expertise and significant financial firepower to
invest in OnTheMarket, allowing us to accelerate our transformation of the
sector. We have strong shared values in our commitment to agents who we
believe will benefit from unparalleled value and greater opportunities to
enhance their businesses."
This summary should be read in conjunction with, and is subject to, the full
text of this Announcement and its Appendices. In particular, the Acquisition
is subject to the Conditions and certain further terms set out in Appendix I
and to the full terms and conditions which will be set out in the Scheme
Document. Appendix II contains details of sources of information and bases of
calculation contained in this Announcement. Appendix III contains certain
details relating to the irrevocable undertakings and letters of intent
referred to in this Announcement. Appendix IV contains definitions of certain
terms used in this Announcement.
Enquiries:
CoStar and Bidco Tel: +1 202 346 6500
Scott Wheeler
Cyndi Eakin
Gene Boxer
Goldman Sachs (sole financial adviser to CoStar and Bidco)
Barry O'Brien Tel: +1 212 902 1000
Warren Stables Tel: +44 20 7774 1000
Tim Creamer Tel: +1 212 902 1000
OnTheMarket Tel: +44 20 7353 4200
Jason Tebb
Tom Carter
Zeus (Rule 3 adviser, joint financial adviser, nominated adviser and joint Tel: +44 20 3829 5000
corporate broker to OnTheMarket)
Jamie Peel
Benjamin Robertson
James Hornigold
Shore Capital (joint financial adviser and joint corporate broker to Tel: +44 20 7408 4090
OnTheMarket)
Daniel Bush
Fiona Conroy
Iain Sexton
Teneo (PR adviser to OnTheMarket) Tel: +44 20 7353 4200
Giles Kernick
Barnaby Harrison
Latham & Watkins (London) LLP is retained as legal adviser to CoStar and
Bidco.
Eversheds Sutherland (International) LLP is retained as legal adviser to
OnTheMarket.
Important notices
Goldman Sachs International, which is authorised by the Prudential Regulation
Authority and regulated by the FCA and the Prudential Regulation Authority in
the United Kingdom, and Goldman Sachs & Co. LLC, which is regulated by
FINRA, are acting exclusively for CoStar and Bidco as financial advisers and
no one else in connection with the matters referred to in this Announcement
and will not be responsible to anyone other than CoStar and Bidco for
providing the protections afforded to clients of Goldman Sachs, or for
providing advice in relation to the matters referred to in this Announcement.
None of Goldman Sachs International, Goldman Sachs & Co. LLC or any of
their respective subsidiaries, affiliates or branches, nor their respective
partners, directors, officers employees or agents owes or accepts any duty,
liability or responsibility whatsoever (whether direct, indirect,
consequential, whether in contract, in tort, under statute or otherwise) to
any person who is not a client of Goldman Sachs International or Goldman Sachs
& Co. LLC in connection with this Announcement, any statement contained
herein or otherwise.
Zeus Capital Limited ("Zeus"), which is authorised and regulated in the United
Kingdom by the FCA, is acting as Rule 3 adviser, joint financial adviser,
nominated adviser and joint corporate broker to OnTheMarket and no one else in
connection with the matters referred to in this Announcement and will not
regard any other person as its client in relation to such matters and will not
be responsible to anyone other than OnTheMarket for providing the protections
afforded to clients of Zeus, nor for providing advice in relation to any
matter referred to in this Announcement. Neither Zeus nor any of its
affiliates owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of Zeus in connection with the
matters referred to in this Announcement, any statement contained herein or
otherwise.
Shore Capital and Corporate Limited and Shore Capital Stockbrokers Limited
(together or individually, "Shore Capital"), which are authorised and
regulated in the United Kingdom by the FCA, are acting as joint financial
adviser and joint corporate broker to OnTheMarket and no one else in
connection with the matters referred to in this Announcement and will not
regard any other person as their client in relation to such matters and will
not be responsible to anyone other than OnTheMarket for providing the
protections afforded to clients of Shore Capital, nor for providing advice in
relation to any matter referred to in this Announcement. Neither Shore Capital
nor any of their affiliates owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client of Shore
Capital in connection with the matters referred to in this Announcement, any
statement contained herein or otherwise.
Further information
This Announcement is for information purposes only and is not intended to and
does not constitute, or form any part of, an offer to sell or subscribe for or
any invitation to purchase or subscribe for any securities or the solicitation
of any vote or approval in any jurisdiction pursuant to the Acquisition or
otherwise. The Acquisition will be implemented solely through and on the terms
set out in the Scheme Document and the accompanying Forms of Proxy (or, in the
event that the Acquisition is to be implemented by means of a Takeover Offer,
the Offer Document and form of acceptance), which will contain the full terms
and conditions of the Acquisition, including details of how to vote in respect
of the Scheme, or to accept the Takeover Offer. Any approval, decision or
other response to the Acquisition should be made only on the basis of the
information in the Scheme Document (or if the Acquisition is implemented by
way of a Takeover Offer, the Offer Document). OnTheMarket Shareholders are
strongly advised to read the formal documentation in relation to the
Acquisition once it has been despatched.
This Announcement does not constitute a prospectus or prospectus exempted
document.
The statements contained in this Announcement are made as at the Announcement
Date, unless some other time is specified in relation to them, and the
publication of this Announcement shall not give rise to any implication that
there has been no change in the facts set forth in this Announcement since
such date.
Overseas Shareholders
This Announcement has been prepared for the purpose of complying with English
law, the AIM Rules, the Code and the Market Abuse Regulation and the
information disclosed may not be the same as that which would have been
disclosed if this Announcement had been prepared in accordance with the laws
of jurisdictions outside the United Kingdom.
The release, publication or distribution of this Announcement in jurisdictions
other than the United Kingdom may be restricted by law and/or regulations and
such laws and/or regulations may affect the availability of the Acquisition to
persons who are not resident in the United Kingdom. Persons who are not
resident in the United Kingdom, or who are subject to laws of any jurisdiction
other than the United Kingdom, should inform themselves about, and observe,
any applicable requirements. Any failure to comply with the applicable legal
or regulatory requirements may constitute a violation of the laws and/or
regulations of any such jurisdiction. To the fullest extent permitted by
applicable law, the companies and persons involved in the Acquisition disclaim
any responsibility and liability for the violation of such restrictions by any
person.
Any person (including, without limitation, nominees, trustees and custodians)
who would, or otherwise intends to, forward this Announcement, the Scheme
Document or any accompanying document(s) to any jurisdiction outside the
United Kingdom should refrain from doing so and seek appropriate professional
advice before taking any action. In particular, the ability of persons who are
not resident in the United Kingdom to vote their OnTheMarket Shares at the
Court Meeting or the General Meeting, or to execute and deliver Forms of Proxy
appointing another to vote their OnTheMarket Shares in respect of the Court
Meeting or the General Meeting on their behalf, may be affected by the laws of
the relevant jurisdiction in which they are located. The Acquisition will be
subject to the applicable requirements of the Code, the Takeover Panel, the
London Stock Exchange (including the AIM Rules) and the FCA.
Unless otherwise determined by CoStar and/or Bidco or required by the Code,
and permitted by applicable law and regulation, the Acquisition will not be
made, directly or indirectly, in or into or by use of the mails or any other
means or instrumentality (including, without limitation, telephonic or
electronic) of interstate or foreign commerce of, or any facility of a
national, state or other securities exchange of, a Restricted Jurisdiction,
and no person may vote in favour of the Scheme, and any Takeover Offer will
not be capable of acceptance, by any such use, means, instrumentality or
facility or from within a Restricted Jurisdiction. Accordingly, copies of this
Announcement and the formal documentation relating to the Acquisition are not
being, and must not be, directly or indirectly, mailed or otherwise forwarded
or distributed in, into or from a Restricted Jurisdiction and persons
receiving this Announcement (including custodians, nominees and trustees) must
not distribute or send it into or from a Restricted Jurisdiction.
In the event that the Acquisition is implemented by way of a Takeover Offer
and extended into the US, Bidco will do so in satisfaction of the procedural
and filing requirements of the US securities laws at that time, to the extent
applicable thereto.
The Acquisition relates to the shares of a company incorporated in England and
it is proposed to be made by means of a scheme of arrangement provided for
under English law. A transaction effected by means of a scheme of arrangement
is not subject to the shareholder vote, proxy solicitation and tender offer
rules under the US Exchange Act. Accordingly, the Scheme is subject to the
disclosure requirements and practices applicable in the UK to schemes of
arrangement, which differ from the disclosure requirements and practices of US
shareholder vote, proxy solicitation and tender offer rules.
If Bidco were to elect to implement the Acquisition by means of a Takeover
Offer, such Takeover Offer shall be made in compliance with all applicable
laws and regulations, including section 14(e) of the US Exchange Act and
Regulation 14E thereunder. Such Takeover Offer would be made in the US by
Bidco and no one else.
In addition to any such Takeover Offer, Bidco, certain affiliated companies
and the nominees or brokers (acting as agents) of Bidco and/or such affiliated
companies may make certain purchases of, or arrangements to purchase,
OnTheMarket Shares outside such Takeover Offer during the period in which such
Takeover Offer would remain open for acceptance. If such purchases or
arrangements to purchase are made, they would be made outside the United
States in compliance with applicable law, including the US Exchange Act.
The receipt of cash consideration by an OnTheMarket Shareholder for the
transfer of their OnTheMarket Shares pursuant to the Scheme will be a taxable
transaction for United States federal income tax purposes and under applicable
US state and local, as well as overseas and other, tax laws. In certain
circumstances, OnTheMarket Shareholders that are not US persons and that
receive cash consideration pursuant to the Scheme may be subject to US
withholding tax. Each OnTheMarket Shareholder is urged to consult an
independent professional adviser regarding the applicable tax consequences of
the Acquisition, including under applicable United States, state and local, as
well as overseas and other tax laws.
Financial information relating to OnTheMarket included in this Announcement
and to be included in the Scheme Document has been, or will have been,
prepared in accordance with accounting standards applicable in the United
Kingdom and may not be comparable to the financial statements of US companies
or companies whose financial statements are prepared in accordance with
generally accepted accounting principles in the United States ("US GAAP"). US
GAAP differs in certain significant respects from accounting standards
applicable in the United Kingdom.
It may be difficult for a US-based investor to enforce their rights and any
claim they may have arising under US securities laws since the Scheme relates
to the shares of a company incorporated under the laws of, and located in, the
United Kingdom, and some or all of its officers and directors may be residents
of non-US jurisdictions. A US-based investor may not be able to sue a company
located in the United Kingdom, or its officers or directors, in a foreign
court for alleged violations of US securities laws, and it may be difficult to
compel a foreign company and its affiliates to subject themselves to a US
court's judgment.
Further details in relation to Overseas Shareholders will be contained in the
Scheme Document.
Forward-looking statements
This Announcement may contain certain "forward-looking statements" with
respect to OnTheMarket, Bidco and CoStar. These forward-looking statements can
be identified by the fact that they do not relate only to historical or
current facts. Forward-looking statements often use words such as
"anticipate", "target", "expect", "estimate", "intend", "plan", "goal",
"believe", "will", "may", "should", "would", "could" or other words or terms
of similar meaning or the negative thereof. Forward-looking statements
include, but are not limited to, statements relating to the following: (a)
future capital expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy, losses and
future prospects; and (b) business and management strategies of CoStar, Bidco
and/or OnTheMarket and the expansion and growth of OnTheMarket.
These forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause actual results, performance or
developments to differ materially from those expressed in or implied by such
forward-looking statements. These forward-looking statements are based on
numerous assumptions regarding present and future strategies and environments.
None of CoStar, Bidco or OnTheMarket, nor any of their respective associates,
directors, officers, employees or advisers, provides any representation,
assurance or guarantee that the occurrence of the events expressed or implied
in any forward-looking statements in this Announcement will actually occur.
You are cautioned not to place undue reliance on such forward-looking
statements, which speak only as of the date hereof. All subsequent oral or
written forward-looking statements attributable to CoStar, Bidco or
OnTheMarket or any person acting on their behalf are expressly qualified in
their entirety by the cautionary statements above. Should one or more of these
risks or uncertainties materialise, or should underlying assumptions prove
incorrect, actual results may vary materially from those described in this
Announcement. CoStar, Bidco and OnTheMarket assume no obligation to update
publicly or revise forward-looking or other statements contained in this
Announcement, whether as a result of new information, future events or
otherwise, except to the extent legally required.
No profit forecasts or estimates
No statement in this Announcement is intended as a profit forecast or estimate
for CoStar, Bidco or OnTheMarket in respect of any period and no statement in
this Announcement should be interpreted to mean that earnings or earnings per
OnTheMarket Share for the current or future financial years would necessarily
match or exceed the historical published earnings or earnings per OnTheMarket
Share.
Publication on website
In accordance with Rule 26.1 of the Code, a copy of this Announcement will be
made available (subject to certain restrictions relating to persons resident
in Restricted Jurisdictions), free of charge, on OnTheMarket's website at
https://plc.onthemarket.com/recommended-cash-acquisition/ by no later than
12:00 noon on the Business Day following the Announcement Date. Neither the
contents of this website nor the content of any other website accessible from
hyperlinks on such website is incorporated into, or forms part of, this
Announcement.
Requesting hard copies
In accordance with Rule 30.3 of the Code, a person so entitled may request a
hard copy of this Announcement, free of charge, by contacting OnTheMarket's
registrar, Link Group, on +44 (0) 371 664 0300 between 9.00 a.m. and 5.30 p.m.
Monday to Friday (London time), excluding public holidays in England and
Wales, or by submitting a request in writing to Link Group, Central Square, 29
Wellington Street, Leeds LS1 4DL or by e-mail to
shareholderenquiries@linkgroup.co.uk. Calls are charged at the standard
geographic rate and will vary by provider. Calls outside the United Kingdom
will be charged at the applicable international rate. Different charges may
apply to calls from mobile telephones and calls may be recorded and randomly
monitored for security and training purposes. The helpline cannot provide
advice on the merits of the Acquisition nor give any financial, legal or tax
advice. For persons who receive a copy of this Announcement in electronic form
or via a website notification, a hard copy of this Announcement will not be
sent unless so requested. In accordance with Rule 30.3 of the Code, a person
so entitled may also request that all future documents, announcements and
information to be sent to them in relation to the Acquisition should be in
hard copy form.
Electronic communications - information for OnTheMarket Shareholders
Please be aware that addresses, electronic addresses and certain information
provided by OnTheMarket Shareholders, persons with information rights and
other relevant persons for the receipt of communications from OnTheMarket may
be provided to Bidco during the Offer Period as required under section 4 of
Appendix 4 of the Code.
Rounding
Certain figures included in this Announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different paragraphs and/or tables may vary slightly and figures shown as
totals in certain paragraphs and/or tables may not be an arithmetic
aggregation of the figures that precede them.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or
more of any class of relevant securities of an offeree company or of any
securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the Offer Period and, if later, following the announcement in
which any securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of: (a) the
offeree company; and (b) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no
later than 3.30 pm on the 10th Business Day (as defined in the Code) following
the commencement of the Offer Period and, if appropriate, by no later than
3.30 pm on the 10th Business Day (as defined in the Code) following the
announcement in which any securities exchange offeror is first identified.
Relevant persons who deal in the relevant securities of the offeree company or
of a securities exchange offeror prior to the deadline for making an Opening
Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1
per cent. or more of any class of relevant securities of the offeree company
or of any securities exchange offeror must make a Dealing Disclosure if the
person deals in any relevant securities of the offeree company or of any
securities exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions in, and
rights to subscribe for, any relevant securities of each of: (a) the offeree
company; and (b) any securities exchange offeror, save to the extent that
these details have previously been disclosed under Rule 8. A Dealing
Disclosure by a person to whom Rule 8.3(b) applies must be made by no later
than 3.30 pm on the Business Day (as defined in the Code) following the date
of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror, and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk (http://www.thetakeoverpanel.org.uk) , including
details of the number of relevant securities in issue, when the Offer Period
commenced and when any offeror was first identified. You should contact the
Takeover Panel's Market Surveillance Unit on +44 (0) 20 7638 0129 if you are
in any doubt as to whether you are required to make an Opening Position
Disclosure or a Dealing Disclosure.
Rule 2.9 of the Code
For the purposes of Rule 2.9 of the Code, OnTheMarket confirms that, as at the
Announcement Date, it had in issue 80,207,785 OnTheMarket Shares. No
OnTheMarket Shares are held in treasury. The ISIN for the OnTheMarket Shares
is GB00BFN3K335.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
19 October 2023
RECOMMENDED ACQUISITION
of
ONTHEMARKET PLC
by
COSTAR UK LIMITED
(a wholly-owned indirect subsidiary of CoStar Group, Inc.)
to be effected by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006
1. Introduction
The board of directors of CoStar UK Limited ("Bidco"), a wholly-owned indirect
subsidiary of CoStar Group, Inc. ("CoStar"), and the board of directors of
OnTheMarket plc ("OnTheMarket") are pleased to announce that they have reached
agreement on the terms of a recommended cash offer to be made by Bidco for the
entire issued and to be issued share capital of OnTheMarket (the
"Acquisition").
It is intended that the Acquisition will be implemented by way of a
Court-sanctioned scheme of arrangement under Part 26 of the Companies Act
(although Bidco reserves the right to effect the Acquisition by way of a
Takeover Offer, with the consent of the Takeover Panel).
2. The Acquisition
Under the terms of the Acquisition, which will be subject to the Conditions
and certain further terms set out in Appendix I and to the full terms and
conditions which will be set out in the Scheme Document, each OnTheMarket
Shareholder will be entitled to receive:
110 pence in cash for each OnTheMarket Share held
The Acquisition values the entire issued and to be issued ordinary share
capital of OnTheMarket at approximately £99 million and represents a premium
of approximately:
· 56.0 per cent. to the Closing Price of 70.50 pence per
OnTheMarket Share on 18 October 2023 (being the Last Practicable Date);
· 93.7 per cent. to 56.79 pence, being the three-month
Volume Weighted Average Price to the Last Practicable Date; and
· 37.5 per cent. to 80.00 pence, being the 52 week high
Closing Price per OnTheMarket Share to the Last Practicable Date.
3. Dividends
If any dividend and/or distribution and/or other return of capital or value is
authorised, announced, declared, made or paid or becomes payable in respect of
the OnTheMarket Shares on or after the Announcement Date and with a record
date prior to the Effective Date, Bidco reserves the right to reduce the
consideration payable under the Acquisition in respect of each OnTheMarket
Share by the aggregate amount of all or part of any such dividend and/or other
distribution and/or other return of capital or value, except where OnTheMarket
Shares are or will be acquired pursuant to the Acquisition on a basis which
entitles Bidco to receive such dividend and/or other distribution and/or other
return of capital or value, provided that, to the extent such dividend and/or
other distribution and/or other return of capital or value is cancelled, the
consideration shall not be subject to change. If Bidco exercises its right or
makes such a reduction in respect of a dividend and/or other distribution
and/or other return of capital or value, OnTheMarket Shareholders will be
entitled to receive and retain such dividend and/or other distribution and/or
other return of capital or value.
4. Recommendation
The OnTheMarket Directors, who have been so advised by Zeus as to the
financial terms of the Acquisition, consider the terms of the Acquisition to
be fair and reasonable. In providing advice to the OnTheMarket Directors, Zeus
has taken into account the commercial assessments of the OnTheMarket
Directors. Zeus is providing independent financial advice to the OnTheMarket
Directors for the purposes of Rule 3 of the Code.
Accordingly, the OnTheMarket Directors intend to recommend unanimously that
Scheme Shareholders vote (or procure the voting) in favour of the Scheme at
the Court Meeting and that OnTheMarket Shareholders vote (or procure the
voting) in favour of the Resolution(s) at the General Meeting (or, if Bidco
exercises its right to implement the Acquisition by way of a Takeover Offer,
to accept, or procure the acceptance of, such Takeover Offer), as each
OnTheMarket Director holding OnTheMarket Shares has irrevocably undertaken to
do in respect of their own beneficial holdings, amounting, in aggregate, to
185,625 OnTheMarket Shares (representing, in aggregate, approximately 0.23 per
cent. of the OnTheMarket Shares in issue on the Last Practicable Date).
5. Background to and reasons for the Acquisition
Bidco and CoStar believe that the Acquisition represents an attractive
strategic entry point for CoStar into the UK residential property market.
OnTheMarket is an asset with an established and differentiated position within
this market. Its digital platform has strong customer relationships and robust
traffic flow that will allow CoStar to continue to accelerate its own
international expansion efforts across the UK and Europe.
OnTheMarket's founding and continued ownership by estate agents - its
customers - has developed a loyal, recurring base of agents that list on the
platform. This has led its advertiser count to nearly triple from
approximately 4,600 in 2015 to over 13,000 today. Strong agent relationships
and listings attract serious property seekers, with OnTheMarket delivering a
6.8 per cent. conversion ratio of website visitors to leads.
OnTheMarket's network of property professionals and breadth of advertiser
relationships provide a strong foundation to compete with the dominant UK
property portals and support the growth of its related software solutions and
data insights. Whilst currently garnering under 10 per cent. of wallet share
in its defined digital portals space, OnTheMarket has a much larger portion of
listings and market coverage than its market share and financial footprint
suggest.
The combination of OnTheMarket's large network of agents and access to
listings with CoStar's fortress balance sheet and strengths as a leasing
commercial property site and the strength of the platform of Homes.com, the
leading US residential portal, seeks to create the number one agent-friendly
UK residential property portal and a genuine disruptor to the established
market leaders. The Acquisition will be an important step in the expansion of
CoStar's Homes.com residential network not only in the UK, but across Europe.
6. Background to and reasons for the recommendation
Agents' Mutual was formed in January 2013 by leading estate and lettings
agents with the intention to create a market-leading residential property
portal to challenge the two existing major portals. Agents' Mutual was the
first major new entrant to the UK portals market since 2008.
In late 2017, members of Agents' Mutual agreed to exchange their membership
interests for shares in OnTheMarket in order to facilitate OnTheMarket's IPO
on AIM. On IPO, OnTheMarket raised £30 million of new funds: (a) to support
the growth of OnTheMarket.com; and (b) to be deployed on marketing to build
brand recognition and deliver more value for agent customers. Agents retained
majority control of OnTheMarket following the IPO, securing its position as
the agents' portal and today agents continue to own approximately 50 per cent.
of OnTheMarket's share capital.
On IPO, the number of advertisers on OnTheMarket.com was approximately 5,500
and OnTheMarket had revenues of £16.0 million for the year ended 31 January
2018. Since IPO, OnTheMarket has made significant progress, with total
advertisers on the portal growing to over 13,200 and revenues increasing to
£34.4 million in the financial year ended 31 January 2023. Moreover, since
December 2020, OnTheMarket has developed and delivered its 'four pillar'
strategy, incorporating Portal, Software, Data and Market Intelligence and
Consumer Communication and Monetisation which has helped to grow valuation
leads by over 500 per cent. since the financial year ended 31 January 2019.
This has been delivered whilst adhering to the founding premise of being the
'agents' portal', offering fair and sustainable pricing using OnTheMarket's
services.
Substantial progress has been made in developing the business and its product
offering to the point where it is a credible challenger to the market leaders,
the business having more than doubled its revenues from IPO and transitioned
from cash burn to cash generation.
Despite this, OnTheMarket's share price has fallen by 45.3 per cent. since the
start of 2022 and 57.3 per cent. since IPO. Additionally, given OnTheMarket's
relatively limited scale and the lack of liquidity of trading in its shares,
the path to having comparable financial resources to those offered by CoStar,
and therefore a similar ability to rapidly scale the business, would be
challenging as an independent entity on the public markets. The OnTheMarket
Directors have carefully evaluated the Acquisition in the context of
OnTheMarket's alternatives, including continuing to execute on a standalone
strategy, and have unanimously determined to recommend the Acquisition as the
best path for OnTheMarket and its stakeholders.
As part of their decision to recommend the Acquisition, the OnTheMarket
Directors have given consideration to the following factors:
Attractive valuation
The valuation multiple that the Acquisition represents is fair, taking into
account the multiples applied to comparable quoted companies and transactions
involving similar businesses.
The 56.0 per cent. premium to the Closing Price of an OnTheMarket Share on the
Last Practicable Date is substantial and the Acquisition price has been
extensively negotiated in order to ensure it reflects OnTheMarket's inherent
strategic value.
Whilst the OnTheMarket Directors are confident that OnTheMarket has a bright
future as an independent company, they are also cognisant of the challenges of
operating as a public entity, particularly amid ongoing macro-economic
uncertainty. The OnTheMarket Directors consider that the opportunity for
OnTheMarket Shareholders to realise their investment at a substantial premium
to the current share price, in cash, is one that they should have the chance
to consider, given that it is unclear as to whether there is a near term
catalyst for a material improvement in OnTheMarket's trading multiple and/or
share price.
Acceleration of OnTheMarket's strategy
The OnTheMarket Directors believe that the Acquisition will materially
accelerate: (a) the trajectory of the 'agents' portal' and what they consider
to be a necessary change in the UK portal landscape; and (b) OnTheMarket's
strategy, through the provision of CoStar's financial strength, support and
expertise, particularly its stated intention to spend £46.5 million on sales
and marketing in the first full year following the commencement of the
integration of the OnTheMarket portal into CoStar's network of residential
marketplaces, as the first stage of a multi-year investment programme
totalling hundreds of millions of pounds.
Additionally, CoStar's expertise will provide growth opportunities with the
development of the OnTheMarket agent and consumer offering through additional
products, services and functionality.
The combination of OnTheMarket's large network of agents and access to
listings, together with the strength of the Homes.com platform and resources
of CoStar, means that OnTheMarket.com has the potential to become the leading
portal in the UK residential property market on a significantly faster
timeline than OnTheMarket could expect to achieve as an independent company.
It is the great potential of this opportunity presented by a combination with
CoStar that has made possible this highly attractive cash offer to OnTheMarket
Shareholders at a substantial premium and that the OnTheMarket Directors
believe will deliver significant benefits for agents and customers.
CoStar's track record and expertise
CoStar's track record of acquiring, investing in and building online property
marketplaces into leading positions is in the best interests of OnTheMarket's
agent shareholders and customers for the long term.
CoStar is a global leader in commercial real estate information and, through
Apartments.com and Homes.com, one of the leading and fastest growing
residential marketplaces in the United States.
CoStar has invested billions of dollars into building the world's leading
online property marketplaces, generating hundreds of millions of leads,
resulting in millions of successful commercial and residential property
transactions for its clients.
CoStar has expressed a clear intention to invest similarly in the OnTheMarket
platform in order to accelerate its strategy for growth.
CoStar has a long-standing presence and history of investment in the UK and a
rapidly growing presence in continental Europe, demonstrating its commitment
to its international growth strategy and intent to realise the potential of
the OnTheMarket platform.
Shared values
CoStar's shared values and stated intention to continue charging agents a
small proportion of Rightmove's current charges are in keeping with the core
ethos of OnTheMarket.
The OnTheMarket Directors believe that CoStar's support for OnTheMarket's
current management will provide continuity for the OnTheMarket Group's
customers, employees and other stakeholders, and also supplements the
significant value upside presented by the combination.
Accordingly, following careful consideration of the above factors, the
OnTheMarket Directors intend to recommend unanimously that OnTheMarket
Shareholders vote (or procure the voting) in favour of the Scheme at the Court
Meeting and the Resolution(s) at the General Meeting.
7. OnTheMarket Shareholder support: Irrevocable undertakings and letters of intent
Bidco has received irrevocable undertakings to vote (or procure the voting) in
favour of the Scheme at the Court Meeting and the Resolution(s) at the General
Meeting (or, if Bidco exercises its right to implement the Acquisition by way
of a Takeover Offer, to accept, or procure the acceptance of, such Takeover
Offer) from each OnTheMarket Director holding OnTheMarket Shares in respect of
their entire beneficial holdings of OnTheMarket Shares, amounting, in
aggregate, to 185,625 OnTheMarket Shares (representing, in aggregate,
approximately 0.23 per cent. of the OnTheMarket Shares in issue on the Last
Practicable Date).
In addition to the irrevocable undertakings from the OnTheMarket Directors
referred to above, Bidco has also received irrevocable undertakings to vote
(or procure the voting) in favour of the Scheme at the Court Meeting and
Resolution(s) at the General Meeting (or, if Bidco exercises its right to
implement the Acquisition by way of a Takeover Offer, to accept, or procure
the acceptance of, such Takeover Offer) from Downing, Harwood, Jason Walker
and Spicerhaart Group Limited in respect of 15,598,651 OnTheMarket Shares
(representing, in aggregate, approximately 19.45 per cent. of the OnTheMarket
Shares in issue on the Last Practicable Date).
In addition to the irrevocable undertakings from the OnTheMarket Directors and
the irrevocable undertakings referred to above, Bidco has received letters of
intent to vote (or procure the voting) in favour of the Scheme at the Court
Meeting and the Resolution(s) at the General Meeting (or, if Bidco exercises
its right to implement the Acquisition by way of a Takeover Offer, to accept,
or procure the acceptance of, such Takeover Offer) from Herald Investment
Management Limited and Schroder Investment Management Limited in respect of
7,881,646 OnTheMarket Shares (representing, in aggregate, approximately 9.83
per cent. of the OnTheMarket Shares in issue on the Last Practicable Date).
In total therefore, Bidco has received irrevocable undertakings and letters of
intent in respect of 23,665,922 OnTheMarket Shares (representing, in
aggregate, approximately 29.51 per cent. of the OnTheMarket Shares in issue on
the Last Practicable Date).
CoStar and OnTheMarket are pleased to confirm that this includes irrevocable
undertakings and letters of intent from each of OnTheMarket's six largest
shareholders.
Full details of the irrevocable undertakings and letters of intent received by
Bidco are set out in Appendix III to this Announcement.
8. Information on Bidco and CoStar
Bidco
Bidco is a private limited company incorporated in England and Wales and is an
indirect wholly-owned subsidiary of CoStar. Bidco is the primary operating and
contracting entity for CoStar's business outside the United States. Further
details in relation to Bidco will be contained in the Scheme Document.
CoStar
CoStar (NASDAQ: CSGP) is a leading provider of online real estate
marketplaces, information and analytics in the property markets. Founded in
1987, CoStar conducts expansive, ongoing research to produce and maintain the
largest and most comprehensive database of real estate information. CoStar has
invested billions of dollars into building the world's leading online property
marketplaces, generating hundreds of millions of leads resulting in millions
of successful commercial and residential property transactions for its
clients. CoStar's websites attracted approximately 280 million visits in
September 2023, and include Homes.com, the agent-friendly, second largest and
fastest growing residential marketplace in the United States. CoStar's brands
also include LoopNet.com, the number one commercial property marketplace and
Apartments.com, the number one apartment marketing site in the United States.
Headquartered in Washington, DC, CoStar maintains offices throughout the
United States, Europe, Canada and Asia with over 5,600 employees globally.
CoStar is listed on the NASDAQ with a market capitalisation of approximately
$33 billion and is a member of the NASDAQ 100 and S&P 500.
CoStar has a long-standing presence and history of investment in the United
Kingdom and has recently expanded further through the launch of LoopNet, the
world's largest commercial property marketplace, in the UK market.
Additionally, through its investments in BureauxLocaux and Business Immo in
France, Thomas Daily in Germany and Belbex in Spain, CoStar is rapidly growing
its presence in continental Europe.
9. Information on OnTheMarket
OnTheMarket (AIM: OTMP) is a leading UK residential property portal provider,
admitted to trading on AIM.
It has extensive knowledge of, and expertise in, the UK residential property
market and is the operator of the OnTheMarket.com property portal.
Since 2015, OnTheMarket has been working to disrupt the market with its unique
agent-friendly model. The OnTheMarket.com property portal has seen rapid
growth and OnTheMarket has expanded its base of estate and letting agents.
OnTheMarket's objective is to create value for shareholders and property
advertiser customers by delivering an agent-backed, tech-enabled portal,
offering a first-class service to agents and new homes developers at fair and
sustainable prices, with the mission to become the go-to portal for serious
property seekers. It is currently the third most visited residential property
portal in the United Kingdom.
OnTheMarket's website and apps provide potential buyers, sellers, landlords
and tenants with a differentiated and innovative property search experience.
Its service concentrates on presenting hundreds of thousands of homes for sale
or rent, from thousands of estate and letting agents or new home developers at
all price points across the UK. Its search services include Farms, Estates and
Land, Student, Commercial, Overseas and Retirement.
OnTheMarket also aims to support its agents in providing a superior service to
their clients by providing a number of value-adding services to increase the
profitability of their own businesses. It is for this reason that many agent
customers choose to launch thousands of their newly instructed UK residential
properties exclusively with OnTheMarket first, 24 hours or more ahead of
advertising them on other property portals, and these are prominently featured
as 'Only With Us'.
10. OnTheMarket current trading and outlook
OnTheMarket current trading and outlook
OnTheMarket's announcement of its unaudited interim results for the six months ended 31 July 2023, released earlier today, contained the following statement (the "Interims Outlook Statement"):
"Outlook
The macro-economic backdrop remains challenging, particularly for the property market, with lower transaction volumes, stubborn inflation, high cost of living, higher interest rates and a reduction in average house prices. The Board expects this to impact customers' businesses, particularly their discretionary spend which may in turn impact annual revenue.
OnTheMarket will focus on opportunities to grow advertiser numbers via packages and short term incentives to stimulate trial and demand, which will in turn support accelerated revenue growth when market conditions improve.
In H2 the Group will focus on customer retention and acquisition which the Board believes will accelerate growth in future periods, while maintaining a level of marketing spend to maximise portal traffic and lead generation for customers. As a result of these factors and decisions, our previously stated aspiration of growing both revenue and profits from last financial year may not be realised.
The Board believes that the company continues to develop an innovative and easy-to-use portal, providing a strong platform to drive revenue growth in the mid-term through investing in consumer awareness, traffic and leads, continuing its strategy to become a tech-enabled property business across the entire customer and consumer ecosystem..."
OnTheMarket FY24 Profit Forecast
OnTheMarket's announcement of its full year results for the financial year ended 31 January 2023, made on 10 July 2023, contained the following statement:
"Despite these headwinds for our customers the Board believes that there is still growth potential for OnTheMarket this year and continues to expect growth in revenue and profitability in FY24."
This statement, made prior to receipt of an approach for the entire issued and to be issued share capital of OnTheMarket, constituted a profit forecast (as defined in the Takeover Code) to which Rule 28.1(c) of the Takeover Code applies (the "OnTheMarket FY24 Profit Forecast").
OnTheMarket Directors' statement for the purposes of Rule 28.1(c)(ii) of the Takeover Code
As a consequence of:
(a) the challenging macroeconomic conditions impacting the businesses of OnTheMarket's customers; and
(b) the mitigating actions that the OnTheMarket Directors intend to take in the second half of the financial year to 31 January 2024 ("H2 2024") to counteract these, including:
(i) focusing on opportunities to grow advertiser numbers via packages and short term incentives to stimulate trial and demand; and
(ii) maintaining marketing spend during H2 2024, in contrast to the approach taken in previous years, to maximise portal traffic and lead generation for customers,
in each case as referred to in the Interims Outlook Statement, and which the OnTheMarket Directors expect will impact upon the OnTheMarket Group's annual revenue and level of profitability, both of which may no longer grow in FY24, the OnTheMarket Directors consider that, for the purposes of Rule 28.1(c)(ii) of the Takeover Code, the OnTheMarket FY24 Profit Forecast is no longer valid.
11. Management, employees, research and development and locations of OnTheMarket
Strategic plans
CoStar is an S&P 500-listed leading global provider of online real estate
marketplaces, information, and analytics with a long and proven track record
of building industry-leading property marketplaces in North America and
Europe. CoStar has been a leading real estate information provider in the UK
for 20 years. CoStar takes a long-term approach, investing in leading
technology, proprietary content, marketing and brand building to provide
differentiated, high value solutions for agents, brokers and end-users of its
marketplaces. CoStar's intention with OnTheMarket is to maintain OnTheMarket's
inherent alignment with, and commitment to, agents and become the leading
property marketplace in the UK.
CoStar recognises that OnTheMarket's position as "the agents' portal" has been
central to the creation, mission and success of OnTheMarket to date.
Similarly, CoStar believes that agents are critical to the success of the
portal and intends to continue to foster this culture, particularly in
relation to OnTheMarket's longstanding opposition to the disintermediation of
agents. CoStar recognises the collaborative nature of those relationships and
would look to strengthen them post-Acquisition.
CoStar has a strong track record of acquiring, investing in and building
online property marketplaces into leading positions, including LoopNet,
Apartments.com, Homes.com, Land.com, BizBuySell, Belbex and many others.
CoStar acquired LoopNet in 2012 and has consistently invested in technology,
new products, marketing and content. LoopNet is now the leading commercial
property marketplace in North America, increasing user traffic by almost 400
per cent. since acquisition, and now expanding in the UK and Europe. In 2014,
CoStar purchased Apartments.com, a small rental marketplace that trailed
numerous industry-leading marketplaces by a significant margin. Today, after
years of investing in content, product and marketing, Apartments.com is now
the clear leading rental marketplace in the United States, surpassing all
other competitors and increasing online traffic by over 400 per cent. in that
period. Most recently, CoStar purchased Homes.com, a small residential
property portal in the United States with traffic of approximately six million
monthly unique visitors. CoStar has established Homes.com as the
agent-friendly site, in sharp contrast with competing US portals that take
large commission splits from their clients. CoStar is investing aggressively
in content, technology and marketing and, in the past year, monthly unique
visitors to Homes.com have surged more than 1,200 per cent., making Homes.com
the fastest growing residential real estate portal in the United States with
over 100 million monthly unique visitors in September 2023 according to Google
Analytics. CoStar believes that the millions of leads it is generating by
connecting home buyers directly to agents is generating billions of dollars of
commissions for those agents. CoStar's network of residential marketplaces in
the US had more monthly visits in September 2023 than Rightmove reported in
their most recent earnings call.
CoStar has clear expertise in growing valuable consumer traffic to real estate
portals and has more than $5 billion in cash on the balance sheet to support
its strategic initiatives, including investment into building traffic to
OnTheMarket's portal for the benefit of OnTheMarket's agent clients. CoStar
intends to invest £46.5 million into sales and marketing in the first full
year following the commencement of the integration of the OnTheMarket portal
into CoStar's network of residential marketplaces. The integration process and
this sales and marketing investment are expected to commence within six months
following the Acquisition becoming Effective. This will be the first stage of
a multi-year investment programme totalling hundreds of millions of pounds to
drive more consumers to the OnTheMarket portal with the goal of significantly
increasing the quantity of valuable leads to OnTheMarket's agent clients. That
amount represents six times OnTheMarket's current annual media spend and more
than three times the annual media spend of Rightmove plc.
Given CoStar's scale and expertise in building leading marketplaces and
OnTheMarket's agent-focused track record, CoStar believes OnTheMarket can
fulfil its potential to become the leading portal in the UK residential
property market. The emergence of a stronger, more competitive player in the
UK market aligned to agents' interests would have a positive market impact and
create more opportunities for OnTheMarket's agents and other market
participants, while providing increased choice and higher quality offerings
for consumers.
Since its founding in 1987, CoStar has worked co-operatively with brokers and
agents in all real estate sectors, with the name "CoStar" purposefully chosen
to emphasise its supporting role in agents' real estate transactions.
Throughout years of investment, CoStar has sought to support agents and their
businesses and has never sought to disintermediate agents. Similar to
OnTheMarket, CoStar believes in fair and sustainable pricing that reflects the
value provided by its information and marketplace solutions. CoStar intends to
continue charging agent clients a small proportion of Rightmove's current
charges.
The terms of OnTheMarket Agent Share Incentive Listing Contracts contain
discretionary equity incentive terms, which shall continue to be honoured
following the Acquisition becoming Effective with a cash payment in lieu of
discretionary equity issuance. It is expected that discretion to issue
incentive awards under such contracts will be exercised in line with past
practice. Following completion of the Acquisition, any OnTheMarket Shares
which are issued at the discretion of OnTheMarket pursuant to the terms of the
OnTheMarket Agent Share Incentive Listing Contracts will be automatically
transferred to Bidco under the terms of the Amended OnTheMarket Articles, in
consideration for, and conditional on, the payment to such agent of an amount
in cash equal to the consideration that the agent would have been entitled to
under the Acquisition had such share been a Scheme Share.
Directors, management and employees
CoStar greatly values the skills, knowledge and expertise of OnTheMarket's
existing management team and employees and recognises their important
contribution to the achievements of OnTheMarket as a business.
Following the Acquisition, CoStar expects that the senior management and
employees of OnTheMarket will continue to contribute to OnTheMarket's success
and does not intend to initiate any material headcount reductions within the
current OnTheMarket organisation or any material changes to the balance of
skills and functions amongst employees.
CoStar believes that the ongoing participation of the senior management of
OnTheMarket is important to the future success of the OnTheMarket business and
expects to put in place incentive arrangements for members of the OnTheMarket
management team following completion of the Acquisition. CoStar has not
entered into or had any discussions, and will not enter into any discussions
prior to the Acquisition becoming Effective, in relation to proposals to enter
into, any form of incentivisation arrangements with members of OnTheMarket's
management.
CoStar intends that, following completion of the Acquisition, the statutory
employment rights of employees, including with respect to pension obligations,
will be fully safeguarded in accordance with applicable law. Following the
Acquisition becoming Effective, CoStar intends to review and align the terms
and conditions of employment of OnTheMarket's employees with CoStar's
employment policies.
No member of the Wider OnTheMarket Group participates in a defined benefit
pension scheme. CoStar has no intention to change OnTheMarket's existing
defined contribution pension arrangements.
Upon the Acquisition becoming Effective, it is intended that each of the three
OnTheMarket non-executive directors will resign from their office as a
director of OnTheMarket.
Research and development
CoStar believes that product investment, alongside research and development,
is important for the long-term success of OnTheMarket and intends to continue
to invest in this area following completion of the Acquisition.
Headquarters and fixed assets
CoStar has a number of offices located in the UK and OnTheMarket has its two
offices, including its headquarters, located in the UK. Within the first six
months following the Acquisition becoming Effective, CoStar expects to review
its combined UK office footprint and consolidate offices in the UK to foster a
culture of collaboration and innovation, a hallmark of CoStar's success as a
high growth, innovative company. OnTheMarket's current office locations are
expected to remain unless and until the review determines otherwise. Save as
set out above in connection with the review of OnTheMarket's locations of
business, CoStar has no intention to redeploy the fixed assets of OnTheMarket.
Trading facilities
The OnTheMarket Shares are currently admitted to trading on AIM. As set out in
paragraph 16, subject to the Scheme becoming Effective, an application will be
made to the London Stock Exchange to cancel the admission of the OnTheMarket
Shares to trading on AIM on or shortly after the Effective Date.
It is intended that OnTheMarket be re-registered as a private limited company
on, or as soon as practicable following, the Effective Date.
No statements in this paragraph 11 are "post-offer undertakings" for the
purposes of Rule 19.5 of the Code.
Views of the OnTheMarket Directors
In considering whether to recommend that OnTheMarket Shareholders vote, or
procure the vote, in favour of the Scheme at the Court Meeting and the
Resolution(s) to be proposed at the General Meeting, the OnTheMarket Directors
have given due consideration to Bidco's intentions for the business,
management, employees and locations of business of OnTheMarket.
The OnTheMarket Directors welcome Bidco's stated intention that, following
completion of the Acquisition, the statutory employment rights, including in
relation to pensions, of all OnTheMarket management and employees will be
fully safeguarded in accordance with applicable law.
The OnTheMarket Directors also welcome Bidco's stated intention not to make
any material headcount reductions within the current OnTheMarket organisation
or any material changes to the balance of skills and functions amongst
employees. The OnTheMarket Directors consider it important that OnTheMarket's
employees who remain with OnTheMarket have certainty as to the continuing
terms of their employment.
In addition, the OnTheMarket Directors are pleased that CoStar has stated its
intention to invest £46.5 million into sales and marketing in the first full
year following the commencement of the integration of the OnTheMarket portal
into CoStar's network of residential marketplaces and as the first stage of a
multi-year investment programme totalling hundreds of millions of pounds to
drive more consumers to the OnTheMarket portal. The OnTheMarket Directors
welcome CoStar's commitment to maintaining fair and sustainable pricing and
stated intention to continue charging agent clients a small proportion of
Rightmove's current charges.
The OnTheMarket Directors also welcome CoStar's commitment to continuing to
honour the terms of the OnTheMarket Agent Share Incentive Listing Contracts
and to continue to exercise the relevant discretions in such contracts to
issue incentive awards in line with past practice.
Having taken into account all relevant factors, the OnTheMarket Directors
believe that the terms of the Acquisition are compelling, acknowledge the
quality and strong prospects of OnTheMarket's business and deliver attractive
value to OnTheMarket Shareholders in cash allowing them to crystallise the
value of their holdings. As such, the OnTheMarket Directors intend to
recommend unanimously that OnTheMarket Shareholders vote, or procure the vote,
in favour of the Scheme at the Court Meeting and the Resolution(s) to be
proposed at the General Meeting.
12. Financing
The cash consideration payable by Bidco to OnTheMarket Shareholders under the
terms of the Acquisition will be funded through the existing cash resources of
CoStar.
Goldman Sachs, in its capacity as financial adviser to Bidco, is satisfied that sufficient resources are available to Bidco to enable it to satisfy in full the cash consideration payable to OnTheMarket Shareholders under the terms of the Acquisition.
Further information on the financing of the Acquisition will be set out in the Scheme Document.
13. Offer-related arrangements
Confidentiality Agreement
CoStar and OnTheMarket entered into a confidentiality agreement dated
31 August 2023 (the "Confidentiality Agreement") pursuant to which, amongst
other things, CoStar has undertaken to: (a) subject to certain exceptions,
keep confidential information relating to OnTheMarket confidential and not to
disclose it to third parties; and (b) use such confidential information only
in connection with the Acquisition. The confidentiality obligations remain in
force for a period of 18 months from the date of the Confidentiality Agreement
(or, if earlier, upon the Scheme becoming Effective or, if the Acquisition is
implemented by way of a Takeover Offer, the Takeover Offer being declared
wholly unconditional). The Confidentiality Agreement also contains
restrictions on CoStar soliciting or employing certain employees of
OnTheMarket.
The Confidentiality Agreement further includes, amongst other things,
standstill obligations which restrict CoStar from acquiring or offering to
acquire interests in certain securities of OnTheMarket; those restrictions
ceased to apply on the making of this Announcement.
14. Structure of the Acquisition
Scheme
It is intended that the Acquisition will be effected by means of a
Court-sanctioned scheme of arrangement between OnTheMarket and the Scheme
Shareholders under Part 26 of the Companies Act. Bidco reserves the right
(with the consent of the Takeover Panel, if required) to implement the
Acquisition by way of a Takeover Offer.
The purpose of the Scheme is to provide for Bidco to acquire and become the
owner of the whole of the issued and to be issued ordinary share capital of
OnTheMarket. Under the Scheme, the Acquisition is to be achieved by the
transfer of the Scheme Shares held by Scheme Shareholders to Bidco in
consideration for which the Scheme Shareholders will receive the consideration
pursuant to the Scheme on the basis set out in this Announcement and to be set
out in the Scheme Document.
Approval by Court Meeting and General Meeting
To become Effective, the Scheme requires, amongst other things, the:
(a) approval of the Scheme by a majority in number of Scheme Shareholders present and voting (and entitled to vote), either in person or by proxy, representing not less than 75 per cent. in value of the Scheme Shares voted by such holders at the Court Meeting; and
(b) approval of the Resolution(s) by the requisite majority or majorities of votes cast at the General Meeting (to be held directly after the Court Meeting).
Application to Court to sanction the Scheme
Once the requisite approvals have been obtained at the Court Meeting and the
General Meeting and the other Conditions have been satisfied or (where
applicable) waived, the Scheme must be sanctioned by the Court at the Sanction
Hearing before it can become Effective.
The Scheme will become Effective in accordance with its terms on delivery of
the Court Order to the Registrar of Companies. Upon the Scheme becoming
Effective, it will be binding on all Scheme Shareholders, irrespective of
whether or not they attended and/or voted at the Court Meeting or General
Meeting, or whether they voted in favour of or against the Scheme.
The Scheme will contain a provision for Bidco and OnTheMarket to consent
jointly, on behalf of all persons concerned, to any modification of or
addition to the Scheme or to any condition that the Court may approve or
impose. OnTheMarket has been advised that the Court would be unlikely to
approve any modification of, or addition to, or impose a condition to the
Scheme which might be material to the interests of Scheme Shareholders unless
Scheme Shareholders were informed of such modification, addition or condition.
It would be a matter for the Court to decide, in its discretion, whether or
not a further meeting of Scheme Shareholders should be held in these
circumstances.
Amended OnTheMarket Articles
Any OnTheMarket Shares issued at or before the Scheme Record Time will be
subject to the terms of the Scheme. Any OnTheMarket Shares issued after the
Scheme Record Time will be subject to the Amended OnTheMarket Articles and
will be automatically transferred to Bidco in accordance with the terms of the
Amended OnTheMarket Articles.
Full details of the Scheme to be set out in the Scheme Document
The Scheme Document will include full details of the Scheme, including the
expected timetable and the action to be taken by Scheme Shareholders. The
Scheme will be governed by English law. The Scheme will be subject to the
applicable requirements of the Code, the Takeover Panel, the AIM Rules, the
London Stock Exchange and the FCA.
The Scheme Document, along with the notices of the Court Meeting and the
General Meeting and the Forms of Proxy will be despatched to OnTheMarket
Shareholders within 28 days of the date of this Announcement or such later
date as may be agreed by the Takeover Panel. Subject to certain restrictions
relating to persons resident in Restricted Jurisdictions, the Scheme Document
will also be made available on OnTheMarket's website at
https://plc.onthemarket.com/recommended-cash-acquisition/. Neither the
contents of this website nor the content of any other website accessible from
hyperlinks on such website is incorporated into, or forms part of, this
Announcement.
Conditions
In addition to the requirements described above, the Acquisition is also conditional on the other Conditions being satisfied or (where applicable) waived.
The Acquisition will lapse if:
(a) the Court Meeting is not held on or before the 22nd day after the expected date of the Court Meeting to be set out in the Scheme Document (or such later date as may be agreed between Bidco and OnTheMarket and the Court may allow);
(b) the General Meeting is not held on or before the 22nd day after the expected date of the General Meeting to be set out in the Scheme Document (or such later date as may be agreed between Bidco and OnTheMarket and the Court may allow); and
(c) the Scheme does not become Effective by the Long Stop Date.
The Scheme is currently expected to become Effective during Q4 2023, subject
to the satisfaction or, where applicable, waiver of the Conditions. An
expected timetable of key events relating to the Acquisition will be provided
in the Scheme Document.
Right to switch to a Takeover Offer
Bidco reserves the right to elect (with the consent of the Takeover Panel, if
required) to implement the Acquisition by way of a Takeover Offer for the
entire issued and to be issued ordinary share capital of OnTheMarket not
already owned by the Wider CoStar Group as an alternative to the Scheme. In
such an event, the Takeover Offer will be implemented on the same terms or, if
Bidco so decides, on such other terms being no less favourable (subject to
appropriate amendments including without limitation, the inclusion of an
acceptance condition set at no more than 90 per cent. of OnTheMarket Shares to
which the Takeover Offer relates (or such lesser percentage, being more than
50 per cent. as may be determined by Bidco with the consent of the Takeover
Panel (if necessary))), so far as applicable, as those which would apply to
the Scheme and subject to the amendment referred to in Part C of Appendix I to
this Announcement. Further, if sufficient acceptances of the Takeover Offer
are received and/or sufficient OnTheMarket Shares are otherwise acquired, it
is the intention of Bidco to apply the provisions of the Companies Act to
compulsorily acquire any outstanding OnTheMarket Shares to which the Takeover
Offer relates.
15. OnTheMarket Share Plans
Participants in the OnTheMarket Share Plans will be contacted regarding the effect of the Acquisition on their rights under the OnTheMarket Share Plans and, where relevant, an appropriate proposal will be made to such participants pursuant to Rule 15 of the Code in due course. Further details of the impact of the Acquisition on the OnTheMarket Share Awards will be set out in the Scheme Document and separate proposal documentation.
16. Cancellation of admission to trading on AIM of the OnTheMarket Shares and re-registration
It is intended that dealings in OnTheMarket Shares will be suspended on or
shortly before the Effective Date at a time to be set out in the Scheme
Document or as separately announced following the date of this Announcement.
It is further intended that an application will be made to the London Stock
Exchange for the cancellation of the admission to trading of the OnTheMarket
Shares on AIM with effect on or shortly after the Effective Date. It is
currently expected that the last day of dealings in OnTheMarket Shares on AIM
will be the Business Day immediately prior to the Effective Date and that no
transfers will be registered after 6.00 p.m. on that date.
Upon the Scheme becoming Effective, share certificates in respect of the
OnTheMarket Shares will cease to be valid and should be destroyed. In
addition, entitlements to OnTheMarket Shares held within the CREST system will
be cancelled on the Effective Date.
As soon as practicable after the Effective Date, it is intended that
OnTheMarket will be re-registered as a private limited company under the
relevant provisions of the Companies Act.
17. Disclosure of interests in OnTheMarket
As at the close of business on the Last Practicable Date, save for the
irrevocable undertakings and letters of intent referred to in paragraphs 4
and 7 above, none of Bidco, its directors, nor so far as Bidco is aware, any
person acting, or deemed to be acting, in concert with Bidco:
(a) had an interest in, or right to subscribe for, relevant securities of OnTheMarket;
(b) had any short position in (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery of, relevant securities of OnTheMarket;
(c) had procured an irrevocable commitment or letter of intent to accept the terms of the Acquisition in respect of relevant securities of OnTheMarket; or
(d) had borrowed, lent or entered into any financial collateral arrangements in respect of any OnTheMarket Shares.
Furthermore, save for the irrevocable undertakings and letters of intent
described in paragraph 7 above, no arrangement exists between Bidco or
OnTheMarket or a person acting in concert with Bidco or OnTheMarket in
relation to OnTheMarket Shares. For these purposes, an "arrangement" includes
any indemnity or option arrangement, any agreement or any understanding,
formal or informal, of whatever nature, relating to OnTheMarket Shares which
may be an inducement to deal or refrain from dealing in such securities.
18. Documents available for inspection
Copies of this Announcement and the following documents will, by no later than
12 noon on the Business Day following the Announcement Date, be made available
on OnTheMarket's website at
https://plc.onthemarket.com/recommended-cash-acquisition/ until the end of the
Offer Period:
· this Announcement;
· the irrevocable undertakings and letters of intent
referred to in paragraph 7;
· the Confidentiality Agreement; and
· consent letters from each of Goldman Sachs, Zeus and
Shore Capital.
Neither the contents of the websites referred to in this Announcement nor the
contents of any website accessible from hyperlinks is incorporated in, or
forms part of, this Announcement.
19. General
The Acquisition will be subject to the Conditions and certain further terms
set out in Appendix I and to the full terms and conditions which will be set
out in the Scheme Document.
In deciding whether or not to vote, or procure the voting, in favour of the
Scheme at the Court Meeting and the Resolution(s) at the General Meeting,
OnTheMarket Shareholders should rely on the information contained, and follow
the procedures described, in the Scheme Document.
Goldman Sachs, Zeus and Shore Capital have each given and not withdrawn their
consent to the inclusion in this Announcement of the references to their names
in the form and context in which they appear.
Appendix II contains details of sources of information and bases of
calculation contained in this Announcement. Appendix III contains certain
details relating to the irrevocable undertakings and letters of intent
referred to in this Announcement. Appendix IV contains definitions of certain
terms used in this Announcement.
Enquiries:
CoStar and Bidco Tel: +1 202 346 6500
Scott Wheeler
Cyndi Eakin
Gene Boxer
Goldman Sachs (sole financial adviser to CoStar and Bidco)
Barry O'Brien Tel: +1 212 902 1000
Warren Stables Tel: +44 20 7774 1000
Tim Creamer Tel: +1 212 902 1000
OnTheMarket Tel: +44 20 7353 4200
Jason Tebb
Tom Carter
Zeus (Rule 3 adviser, joint financial adviser, nominated adviser and joint Tel: +44 20 3829 5000
corporate broker to OnTheMarket)
Jamie Peel
Benjamin Robertson
James Hornigold
Shore Capital (joint financial adviser and joint corporate broker to Tel: +44 20 7408 4090
OnTheMarket)
Daniel Bush
Fiona Conroy
Iain Sexton
Teneo (PR adviser to OnTheMarket) Tel: +44 20 7353 4200
Giles Kernick
Barnaby Harrison
Latham & Watkins (London) LLP is retained as legal adviser to CoStar and
Bidco.
Eversheds Sutherland (International) LLP is retained as legal adviser to
OnTheMarket.
Important notices
Goldman Sachs International, which is authorised by the Prudential Regulation
Authority and regulated by the FCA and the Prudential Regulation Authority in
the United Kingdom, and Goldman Sachs & Co. LLC, which is regulated by
FINRA, are acting exclusively for CoStar and Bidco as financial advisers and
no one else in connection with the matters referred to in this Announcement
and will not be responsible to anyone other than CoStar and Bidco for
providing the protections afforded to clients of Goldman Sachs, or for
providing advice in relation to the matters referred to in this Announcement.
None of Goldman Sachs International, Goldman Sachs & Co. LLC or any of
their respective subsidiaries, affiliates or branches, nor their respective
partners, directors, officers employees or agents owes or accepts any duty,
liability or responsibility whatsoever (whether direct, indirect,
consequential, whether in contract, in tort, under statute or otherwise) to
any person who is not a client of Goldman Sachs International or Goldman Sachs
& Co. LLC in connection with this Announcement, any statement contained
herein or otherwise.
Zeus Capital Limited ("Zeus"), which is authorised and regulated in the United
Kingdom by the FCA, is acting as Rule 3 adviser, joint financial adviser,
nominated adviser and joint corporate broker to OnTheMarket and no one else in
connection with the matters referred to in this Announcement and will not
regard any other person as its client in relation to such matters and will not
be responsible to anyone other than OnTheMarket for providing the protections
afforded to clients of Zeus, nor for providing advice in relation to any
matter referred to in this Announcement. Neither Zeus nor any of its
affiliates owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of Zeus in connection with the
matters referred to in this Announcement, any statement contained herein or
otherwise.
Shore Capital and Corporate Limited and Shore Capital Stockbrokers Limited
(together or individually, "Shore Capital"), which are authorised and
regulated in the United Kingdom by the FCA, are acting as joint financial
adviser and joint corporate broker to OnTheMarket and no one else in
connection with the matters referred to in this Announcement and will not
regard any other person as their client in relation to such matters and will
not be responsible to anyone other than OnTheMarket for providing the
protections afforded to clients of Shore Capital, nor for providing advice in
relation to any matter referred to in this Announcement. Neither Shore Capital
nor any of their affiliates owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client of Shore
Capital in connection with the matters referred to in this Announcement, any
statement contained herein or otherwise.
Further information
This Announcement is for information purposes only and is not intended to and
does not constitute, or form any part of, an offer to sell or subscribe for or
any invitation to purchase or subscribe for any securities or the solicitation
of any vote or approval in any jurisdiction pursuant to the Acquisition or
otherwise. The Acquisition will be implemented solely through and on the terms
set out in the Scheme Document and the accompanying Forms of Proxy (or, in the
event that the Acquisition is to be implemented by means of a Takeover Offer,
the Offer Document and form of acceptance), which will contain the full terms
and conditions of the Acquisition, including details of how to vote in respect
of the Scheme, or to accept the Takeover Offer. Any approval, decision or
other response to the Acquisition should be made only on the basis of the
information in the Scheme Document (or if the Acquisition is implemented by
way of a Takeover Offer, the Offer Document). OnTheMarket Shareholders are
strongly advised to read the formal documentation in relation to the
Acquisition once it has been despatched.
This Announcement does not constitute a prospectus or prospectus exempted
document.
The statements contained in this Announcement are made as at the Announcement
Date, unless some other time is specified in relation to them, and the
publication of this Announcement shall not give rise to any implication that
there has been no change in the facts set forth in this Announcement since
such date.
Overseas Shareholders
This Announcement has been prepared for the purpose of complying with English
law, the AIM Rules, the Code and the Market Abuse Regulation and the
information disclosed may not be the same as that which would have been
disclosed if this Announcement had been prepared in accordance with the laws
of jurisdictions outside the United Kingdom.
The release, publication or distribution of this Announcement in jurisdictions
other than the United Kingdom may be restricted by law and/or regulations and
such laws and/or regulations may affect the availability of the Acquisition to
persons who are not resident in the United Kingdom. Persons who are not
resident in the United Kingdom, or who are subject to laws of any jurisdiction
other than the United Kingdom, should inform themselves about, and observe,
any applicable requirements. Any failure to comply with the applicable legal
or regulatory requirements may constitute a violation of the laws and/or
regulations of any such jurisdiction. To the fullest extent permitted by
applicable law, the companies and persons involved in the Acquisition disclaim
any responsibility and liability for the violation of such restrictions by any
person.
Any person (including, without limitation, nominees, trustees and custodians)
who would, or otherwise intends to, forward this Announcement, the Scheme
Document or any accompanying document(s) to any jurisdiction outside the
United Kingdom should refrain from doing so and seek appropriate professional
advice before taking any action. In particular, the ability of persons who are
not resident in the United Kingdom to vote their OnTheMarket Shares at the
Court Meeting or the General Meeting, or to execute and deliver Forms of Proxy
appointing another to vote their OnTheMarket Shares in respect of the Court
Meeting or the General Meeting on their behalf, may be affected by the laws of
the relevant jurisdiction in which they are located. The Acquisition will be
subject to the applicable requirements of the Code, the Takeover Panel, the
London Stock Exchange (including the AIM Rules) and the FCA.
Unless otherwise determined by CoStar and/or Bidco or required by the Code,
and permitted by applicable law and regulation, the Acquisition will not be
made, directly or indirectly, in or into or by use of the mails or any other
means or instrumentality (including, without limitation, telephonic or
electronic) of interstate or foreign commerce of, or any facility of a
national, state or other securities exchange of, a Restricted Jurisdiction,
and no person may vote in favour of the Scheme, and any Takeover Offer will
not be capable of acceptance, by any such use, means, instrumentality or
facility or from within a Restricted Jurisdiction. Accordingly, copies of this
Announcement and the formal documentation relating to the Acquisition are not
being, and must not be, directly or indirectly, mailed or otherwise forwarded
or distributed in, into or from a Restricted Jurisdiction and persons
receiving this Announcement (including custodians, nominees and trustees) must
not distribute or send it into or from a Restricted Jurisdiction.
In the event that the Acquisition is implemented by way of a Takeover Offer
and extended into the US, Bidco will do so in satisfaction of the procedural
and filing requirements of the US securities laws at that time, to the extent
applicable thereto.
The Acquisition relates to the shares of a company incorporated in England and
it is proposed to be made by means of a scheme of arrangement provided for
under English law.. A transaction effected by means of a scheme of arrangement
is not subject to the shareholder vote, proxy solicitation and tender offer
rules under the US Exchange Act. Accordingly, the Scheme is subject to the
disclosure requirements and practices applicable in the UK to schemes of
arrangement, which differ from the disclosure requirements and practices of US
shareholder vote, proxy solicitation and tender offer rules.
If Bidco were to elect to implement the Acquisition by means of a Takeover
Offer, such Takeover Offer shall be made in compliance with all applicable
laws and regulations, including section 14(e) of the US Exchange Act and
Regulation 14E thereunder. Such Takeover Offer would be made in the US by
Bidco and no one else.
In addition to any such Takeover Offer, Bidco, certain affiliated companies
and the nominees or brokers (acting as agents) of Bidco and/or such affiliated
companies may make certain purchases of, or arrangements to purchase,
OnTheMarket Shares outside such Takeover Offer during the period in which such
Takeover Offer would remain open for acceptance. If such purchases or
arrangements to purchase are made, they would be made outside the United
States in compliance with applicable law, including the US Exchange Act.
The receipt of cash consideration by an OnTheMarket Shareholder for the
transfer of their OnTheMarket Shares pursuant to the Scheme will be a taxable
transaction for United States federal income tax purposes and under applicable
US state and local, as well as overseas and other, tax laws. In certain
circumstances, OnTheMarket Shareholders that are not US persons and that
receive cash consideration pursuant to the Scheme may be subject to US
withholding tax. Each OnTheMarket Shareholder is urged to consult an
independent professional adviser regarding the applicable tax consequences of
the Acquisition, including under applicable United States, state and local, as
well as overseas and other tax laws.
Financial information relating to OnTheMarket included in this Announcement
and to be included in the Scheme Document has been, or will have been,
prepared in accordance with accounting standards applicable in the United
Kingdom and may not be comparable to the financial statements of US companies
or companies whose financial statements are prepared in accordance with
generally accepted accounting principles in the United States ("US GAAP"). US
GAAP differs in certain significant respects from accounting standards
applicable in the United Kingdom.
It may be difficult for a US-based investor to enforce their rights and any
claim they may have arising under US securities laws since the Scheme relates
to the shares of a company incorporated under the laws of, and located in, the
United Kingdom, and some or all of its officers and directors may be residents
of non-US jurisdictions. A US-based investor may not be able to sue a company
located in the United Kingdom, or its officers or directors, in a foreign
court for alleged violations of US securities laws, and it may be difficult to
compel a foreign company and its affiliates to subject themselves to a US
court's judgment.
Further details in relation to Overseas Shareholders will be contained in the
Scheme Document.
Forward-looking statements
This Announcement may contain certain "forward-looking statements" with
respect to OnTheMarket, Bidco and CoStar. These forward-looking statements can
be identified by the fact that they do not relate only to historical or
current facts. Forward-looking statements often use words such as
"anticipate", "target", "expect", "estimate", "intend", "plan", "goal",
"believe", "will", "may", "should", "would", "could" or other words or terms
of similar meaning or the negative thereof. Forward-looking statements
include, but are not limited to, statements relating to the following: (a)
future capital expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy, losses and
future prospects; and (b) business and management strategies of CoStar, Bidco
and/or OnTheMarket and the expansion and growth of OnTheMarket.
These forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause actual results, performance or
developments to differ materially from those expressed in or implied by such
forward-looking statements. These forward-looking statements are based on
numerous assumptions regarding present and future strategies and environments.
None of CoStar, Bidco or OnTheMarket, nor any of their respective associates,
directors, officers, employees or advisers, provides any representation,
assurance or guarantee that the occurrence of the events expressed or implied
in any forward-looking statements in this Announcement will actually occur.
You are cautioned not to place undue reliance on such forward-looking
statements, which speak only as of the date hereof. All subsequent oral or
written forward-looking statements attributable to CoStar, Bidco or
OnTheMarket or any person acting on their behalf are expressly qualified in
their entirety by the cautionary statements above. Should one or more of these
risks or uncertainties materialise, or should underlying assumptions prove
incorrect, actual results may vary materially from those described in this
Announcement. CoStar, Bidco and OnTheMarket assume no obligation to update
publicly or revise forward-looking or other statements contained in this
Announcement, whether as a result of new information, future events or
otherwise, except to the extent legally required.
No profit forecasts or estimates
No statement in this Announcement is intended as a profit forecast or estimate
for CoStar, Bidco or OnTheMarket in respect of any period and no statement in
this Announcement should be interpreted to mean that earnings or earnings per
OnTheMarket Share for the current or future financial years would necessarily
match or exceed the historical published earnings or earnings per OnTheMarket
Share.
Publication on website
In accordance with Rule 26.1 of the Code, a copy of this Announcement will be
made available (subject to certain restrictions relating to persons resident
in Restricted Jurisdictions), free of charge, on OnTheMarket's website at
https://plc.onthemarket.com/recommended-cash-acquisition/ by no later than
12:00 noon on the Business Day following the Announcement Date. Neither the
contents of this website nor the content of any other website accessible from
hyperlinks on such website is incorporated into, or forms part of, this
Announcement.
Requesting hard copies
In accordance with Rule 30.3 of the Code, a person so entitled may request a
hard copy of this Announcement, free of charge, by contacting OnTheMarket's
registrar, Link Group, on +44 (0) 371 664 0300 between 9.00 a.m. and 5.30 p.m.
Monday to Friday (London time), excluding public holidays in England and
Wales, or by submitting a request in writing to Link Group, Central Square, 29
Wellington Street, Leeds LS1 4DL or by e-mail to
shareholderenquiries@linkgroup.co.uk. Calls are charged at the standard
geographic rate and will vary by provider. Calls outside the United Kingdom
will be charged at the applicable international rate. Different charges may
apply to calls from mobile telephones and calls may be recorded and randomly
monitored for security and training purposes. The helpline cannot provide
advice on the merits of the Acquisition nor give any financial, legal or tax
advice. For persons who receive a copy of this Announcement in electronic form
or via a website notification, a hard copy of this Announcement will not be
sent unless so requested. In accordance with Rule 30.3 of the Code, a person
so entitled may also request that all future documents, announcements and
information to be sent to them in relation to the Acquisition should be in
hard copy form.
Electronic communications - information for OnTheMarket Shareholders
Please be aware that addresses, electronic addresses and certain information
provided by OnTheMarket Shareholders, persons with information rights and
other relevant persons for the receipt of communications from OnTheMarket may
be provided to Bidco during the Offer Period as required under section 4 of
Appendix 4 of the Code.
Rounding
Certain figures included in this Announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different paragraphs and/or tables may vary slightly and figures shown as
totals in certain paragraphs and/or tables may not be an arithmetic
aggregation of the figures that precede them.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or
more of any class of relevant securities of an offeree company or of any
securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the Offer Period and, if later, following the announcement in
which any securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of: (a) the
offeree company; and (b) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no
later than 3.30 pm on the 10th Business Day (as defined in the Code) following
the commencement of the Offer Period and, if appropriate, by no later than
3.30 pm on the 10th Business Day (as defined in the Code) following the
announcement in which any securities exchange offeror is first identified.
Relevant persons who deal in the relevant securities of the offeree company or
of a securities exchange offeror prior to the deadline for making an Opening
Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1
per cent. or more of any class of relevant securities of the offeree company
or of any securities exchange offeror must make a Dealing Disclosure if the
person deals in any relevant securities of the offeree company or of any
securities exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions in, and
rights to subscribe for, any relevant securities of each of: (a) the offeree
company; and (b) any securities exchange offeror, save to the extent that
these details have previously been disclosed under Rule 8. A Dealing
Disclosure by a person to whom Rule 8.3(b) applies must be made by no later
than 3.30 pm on the Business Day (as defined in the Code) following the date
of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror, and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk (http://www.thetakeoverpanel.org.uk) , including
details of the number of relevant securities in issue, when the Offer Period
commenced and when any offeror was first identified. You should contact the
Takeover Panel's Market Surveillance Unit on +44 (0) 20 7638 0129 if you are
in any doubt as to whether you are required to make an Opening Position
Disclosure or a Dealing Disclosure.
Rule 2.9 of the Code
For the purposes of Rule 2.9 of the Code, OnTheMarket confirms that, as at the
Announcement Date, it had in issue 80,207,785 OnTheMarket Shares. No
OnTheMarket Shares are held in treasury. The ISIN for the OnTheMarket Shares
is GB00BFN3K335.
APPENDIX I
CONDITIONS OF THE ACQUISITION AND CERTAIN FURTHER TERMS
Part A: Conditions of the Scheme and the Acquisition
Long Stop Date
1. The Acquisition will be conditional upon the Scheme
becoming unconditional and Effective subject to the Code, by not later than
11:59 p.m. on the Long Stop Date.
Scheme approval
2. The Scheme will be subject to the following Conditions:
(a)
(i) approval of the Scheme at the Court Meeting (and at any
separate class meeting that may be required by the Court) by a majority in
number of Scheme Shareholders (or the relevant class or classes thereof, if
applicable) who are on the register of members of OnTheMarket at the Voting
Record Time and who are present, entitled to vote and voting, whether in
person or by proxy, at the Court Meeting (and at any separate class meeting
which may be required by the Court) and who represent 75 per cent. or more in
value of the Scheme Shares voted by those Scheme Shareholders; and
(ii) the Court Meeting (and any separate class meeting which may
be required by the Court) being held on or before the 22nd day after the
expected date of the Court Meeting to be set out in the Scheme Document (or
such later date, if any, as Bidco and OnTheMarket may agree, with the approval
of the Court, if such approval is required);
(b)
(i) the passing of the Resolution(s) by the requisite majority
or majorities at the General Meeting (or any adjournment(s) thereof); and
(ii) the General Meeting being held on or before the 22nd day
after the expected date of the General Meeting to be set out in the Scheme
Document (or such later date, if any, as Bidco and OnTheMarket may agree, with
the approval of the Court, if such approval is required); and
(c)
(i) the sanction of the Scheme by the Court (with or without
modification but subject to any modification being on terms acceptable to
Bidco); and
(ii) the Sanction Hearing being held on or before the 22nd day
after the expected date of the Sanction Hearing to be set out in the Scheme
Document (or such later date, if any, as Bidco and OnTheMarket may agree, with
the approval of the Court, if such approval is required).
3. In addition, except as provided in Part B below and subject
to the requirements of the Takeover Panel, the Acquisition shall be
conditional upon the following Conditions and, accordingly, the necessary
actions to make the Scheme Effective shall not be taken unless such Conditions
(as amended, if appropriate) have been satisfied or, where relevant, waived
prior to the Scheme being sanctioned by the Court:
Antitrust approvals
(a) all material notifications, filings or applications which
are necessary or considered appropriate or desirable by Bidco having been made
in connection with the Acquisition and all necessary waiting periods
(including any extensions thereof) under any applicable legislation or
regulation of any jurisdiction having expired, lapsed or been terminated (as
appropriate) and all statutory and regulatory obligations in any jurisdiction
having been complied with in each case in respect of the Acquisition and all
Authorisations deemed reasonably necessary or appropriate by Bidco in any
jurisdiction for or in respect of the Acquisition and, except pursuant to
Chapter 3 of Part 28 of the Companies Act, the acquisition or the proposed
acquisition of any shares or other securities in, or control or management of,
OnTheMarket or any other member of the Wider OnTheMarket Group by any member
of the Wider CoStar Group having been obtained in terms and in a form
reasonably satisfactory to Bidco from all appropriate Third Parties or
(without prejudice to the generality of the foregoing) from any person or
bodies with whom any member of the Wider OnTheMarket Group or the Wider CoStar
Group has entered into material contractual arrangements and all such
Authorisations necessary, appropriate or desirable to carry on the business of
any member of the Wider OnTheMarket Group in any jurisdiction having been
obtained and all such Authorisations remaining in full force and effect at the
time at which the Acquisition becomes Effective or otherwise wholly
unconditional and there being no notice or intimation of an intention to
revoke, suspend, restrict, modify or not to renew such Authorisations;
Third Party regulatory action
(b) save as set out in respect of Condition 3(a), no Third Party
having decided, threatened or given notice of a decision to take, institute,
implement or threaten any action, proceeding, suit, investigation, enquiry or
reference, or having required any action to be taken or otherwise having done
anything, or having enacted, made or proposed any statute, regulation,
decision, order or change to published practice and there not continuing to be
outstanding any statute, regulation, decision or order (and in each case not
having withdrawn the same) which would or might reasonably be expected to (in
any case to an extent or in a manner which is materially adverse in the
context of the Acquisition or the Wider OnTheMarket Group, taken as a whole):
(i) require, prevent or materially delay the divestiture or
materially alter the terms envisaged for such divestiture by any member of the
Wider CoStar Group or by any member of the Wider OnTheMarket Group of all or
any material part of their respective businesses, assets, property or any
shares or other securities (or the equivalent) in any member of the Wider
OnTheMarket Group or any member of the Wider CoStar Group or impose any
material limitation on the ability of all or any of them to conduct their
respective businesses (or any material part thereof) or to own, control or
manage any of their respective material assets or properties (or any part
thereof);
(ii) except pursuant to Chapter 3 of Part 28 of the Companies Act
in the event that Bidco elects to implement the Acquisition by way of a
Takeover Offer, require any member of the Wider CoStar Group or the Wider
OnTheMarket Group to acquire, or offer to acquire, any shares, other
securities (or the equivalent) or interest in, or any asset owned by, any
Third Party (other than in connection with the implementation of the
Acquisition);
(iii) impose any material limitation on, or result in a material
delay in, the ability of any member of the Wider CoStar Group, directly or
indirectly, to acquire, hold or exercise effectively all or any rights of
ownership in respect of shares or loans or securities convertible into shares
or other securities (or the equivalent) in OnTheMarket or on the ability of
any member of the Wider OnTheMarket Group or any member of the Wider CoStar
Group, directly or indirectly, to hold or exercise effectively all or any
rights of ownership in respect of shares or loans or any other securities (or
the equivalent) in, or to exercise voting or management control over, any
other member of the Wider OnTheMarket Group;
(iv) result in any member of the Wider OnTheMarket Group or any
member of the Wider CoStar Group ceasing to be able to carry on business under
any names under which it currently carries on business;
(v) make the Acquisition or its implementation void, unenforceable
and/or illegal under the laws of any relevant jurisdiction, or otherwise,
directly or indirectly, materially prevent or prohibit, restrict, restrain or
delay or otherwise interfere with to a material extent the implementation of,
or impose material additional conditions or obligations with respect to, or
otherwise materially challenge, impede, interfere or require material
amendment to the terms of the Acquisition;
(vi) impose any material limitation on, or result in material delay
in, the ability of any member of the Wider CoStar Group or any member of the
Wider OnTheMarket Group to conduct, integrate or co-ordinate all or any part
of its business with all or any part of the business of any other member of
the Wider CoStar Group and/or the Wider OnTheMarket Group;
(vii) require any member of the Wider OnTheMarket Group to relinquish,
terminate or amend in any material way any material contract to which any
member of the Wider OnTheMarket Group or the Wider CoStar Group is a party;
(viii) require any member of the Wider CoStar Group or any member of the
Wider OnTheMarket Group or any of their respective affiliates to: (A) invest,
contribute or loan any capital or assets to; or (B) guarantee or pledge
capital assets for the benefit of, any member of the Wider CoStar Group or any
member of the Wider OnTheMarket Group, which, in each such case or together is
material and adverse in the context of the Wider OnTheMarket Group, taken as a
whole, or in the context of the Acquisition; or
(ix) otherwise materially adversely affect all or any of the
business, value, assets, liabilities, profits, operational performance,
financial or trading position or prospects of any member of the Wider
OnTheMarket Group or any member of the Wider CoStar Group,
and all applicable waiting and other time periods (including any extensions
thereof) during which any such Third Party could decide to take, institute,
implement or threaten any such action, proceeding, suit, investigation,
enquiry or reference or take any other step under the laws of any jurisdiction
in respect of the Acquisition or the acquisition or proposed acquisition of
any OnTheMarket Shares or other securities in, or control or management of,
OnTheMarket or otherwise intervene having expired, lapsed or been terminated;
Other regulatory approvals
(c) each Governmental Entity, which regulates or licences any
member of the OnTheMarket Group or any other body corporate in which any
member of the OnTheMarket Group has an interest in shares, and whose prior
approval, consent or non-objection to any change in control, or acquisition of
(or increase in) control in respect of that or any other member of the
OnTheMarket Group is required, or any Governmental Entity, whose prior
approval of, consent to or non-objection to the Acquisition is otherwise
required, or from whom one or more material licences or permissions are
required in order to complete the Acquisition, having given its approval,
non-objection or legitimate deemed consent or consent in writing thereto and,
as the case may be, having granted such licences and permissions (in each case
where required and on terms reasonably satisfactory to Bidco), and, in each
case, the impact of which would be, or might reasonably be expected to be,
materially adverse to the Wider OnTheMarket Group, taken as a whole;
Notifications, waiting periods and authorisations
(d) all material notifications, filings or applications which
are necessary having been made in connection with the Acquisition and all
necessary waiting and other time periods (including any extensions thereof)
under any applicable legislation or regulation of any jurisdiction having
expired, lapsed or been terminated (as appropriate) and all statutory and
regulatory obligations in any jurisdiction having been complied with, in each
case, in respect of the Acquisition and all Authorisations deemed reasonably
necessary by Bidco in any jurisdiction for or in respect of the Acquisition
and, except pursuant to Chapter 3 of Part 28 of the Companies Act in respect
of the Acquisition having been obtained in a form reasonably satisfactory to
Bidco from all appropriate Third Parties and all such Authorisations remaining
in full force and effect at the time at which the Acquisition becomes
Effective or otherwise wholly unconditional and there being no notice or
intimation of an intention to revoke, suspend, restrict, modify or not to
renew such Authorisations, in each case, in a way that would be materially
adverse to the Wider OnTheMarket Group, taken as a whole;
Certain matters arising as a result of any arrangement, agreement, etc.
(e) except as Disclosed, there being no provision of any
arrangement, agreement, lease, licence, franchise, permit or other instrument
to which any member of the Wider OnTheMarket Group is a party, or by or to
which any such member or any of its material assets is or may be bound,
entitled or subject, or any event or circumstance which, as a consequence of
the Acquisition, would or might reasonably be expected to result in (in each
case to an extent or in a manner which is materially adverse in the context of
the Wider OnTheMarket Group, taken as a whole):
(i) any monies borrowed by, or any other indebtedness or
liabilities (actual or contingent) of, or any grant available to, any such
member being or becoming repayable, or capable of being declared repayable,
immediately or prior to its or their stated maturity date or repayment date,
or the ability of any such member to borrow monies or incur any indebtedness
being withdrawn or inhibited or being capable of becoming or being withdrawn
or inhibited;
(ii) the creation, save in the ordinary and usual course of
business, or enforcement of any mortgage, charge or other security interest
over the whole or any part of the business, property or assets of such member
or any such mortgage, charge or other security interest (whenever created,
arising or having arisen) becoming enforceable;
(iii) any such arrangement, agreement, lease, licence, franchise,
permit or other instrument or the rights, liabilities, obligations or
interests of any such member in or with any other person (or any arrangement
or arrangements relating to any such interests or business) being materially
adversely modified or adversely affected or any onerous obligation or
liability arising or any adverse action being terminated, taken or arising
thereunder;
(iv) any liability of any such member to make any severance,
termination, bonus or other payment to any of its directors or other officers;
(v) the rights, liabilities, obligations, interests or business of
any such member under any such arrangement, agreement, licence, permit, lease
or instrument or the interests or business of any such member or any member of
the Wider OnTheMarket Group in or with any other person or body or firm or
company (or any arrangement relating to any such interests or business) being
terminated, or materially adversely modified or affected or any onerous
obligation or liability arising or any adverse action being taken thereunder;
(vi) any such member ceasing to be able to carry on business under
any name under which it presently carries on business;
(vii) any assets or interests of, or any asset the use of which is
enjoyed by, any such member being or falling to be disposed of or charged or
any right arising under which any such asset or interest could be required to
be disposed of or charged or could cease to be available to any such member
otherwise than in the ordinary course of business;
(viii) the financial or trading position or prospects of any such member
being materially prejudiced or materially adversely affected; or
(ix) the creation or acceleration of any material liability (actual
or contingent) by any such member other than trade creditors or other
liabilities incurred in the ordinary course of business or in connection with
the Acquisition,
and, except as Disclosed, no event having occurred which, under any provision
of any arrangement, agreement, licence, permit, franchise, lease or other
instrument to which any member of the Wider OnTheMarket Group is a party or by
or to which any such member or any of its assets are bound, entitled or
subject, would or might reasonably be expected to result in any of the events
or circumstances as are referred to in Conditions (e)(i) to (ix) above, in
each case, which is or would be materially adverse in the context of the Wider
OnTheMarket Group, taken as a whole;
Certain events occurring since 31 January 2023
(f) except as Disclosed, no member of the Wider OnTheMarket
Group having since 31 January 2023:
(i) except for shares issued or transferred out of treasury
pursuant to, or in connection with, awards under the OnTheMarket Share Plans
or in connection with any OnTheMarket Agent Share Incentive Listing Contracts
to the extent such shares have become issuable and have been issued at the
relevant date pursuant to, and in accordance with, the relevant OnTheMarket
Agent Share Incentive Listing Contract, issued or agreed to issue or
authorised or proposed or announced its intention to authorise or propose the
issue, of additional shares of any class, or securities or securities
convertible into, or exchangeable for, or rights, warrants or options to
subscribe for or acquire, any such shares, securities or convertible
securities or transferred or sold or agreed to transfer or sell or authorised
or proposed the transfer or sale of OnTheMarket Shares out of treasury
(except, where relevant, as between OnTheMarket and wholly-owned subsidiaries
of OnTheMarket or between the wholly-owned subsidiaries of OnTheMarket);
(ii) recommended, declared, paid or made or proposed to recommend,
declare, pay or make any bonus, dividend or other distribution (whether
payable in cash or otherwise) other than dividends (or other distributions
whether payable in cash or otherwise) lawfully paid or made by any
wholly-owned subsidiary of OnTheMarket to OnTheMarket or any of its
wholly-owned subsidiaries;
(iii) other than pursuant to the Acquisition (and except for
transactions between OnTheMarket and its wholly-owned subsidiaries or between
the wholly-owned subsidiaries of OnTheMarket and transactions in the ordinary
course of business) implemented, effected, authorised or proposed or announced
its intention to implement, effect, authorise or propose any merger, demerger,
reconstruction, amalgamation, scheme, commitment or acquisition or disposal of
assets or shares or loan capital (or the equivalent thereof) in any
undertaking or undertakings;
(iv) except for transactions between OnTheMarket and its
wholly-owned subsidiaries or between the wholly-owned subsidiaries of
OnTheMarket and transactions in the ordinary course of business, disposed of,
or transferred, mortgaged or created any security interest over any material
asset or any right, title or interest in any material asset or authorised,
proposed or announced any intention to do so;
(v) except for transactions between OnTheMarket and its
wholly-owned subsidiaries or between the wholly-owned subsidiaries of
OnTheMarket issued, authorised or proposed, or announced an intention to
authorise or propose the issue of, or made any change in or to the terms of,
any debentures or become subject to any contingent liability or incurred or
increased any indebtedness;
(vi) entered into or varied any material contract, arrangement,
agreement, transaction or commitment (whether in respect of capital
expenditure or otherwise) which is of a long term, unusual or onerous nature
or magnitude or which is or which involves or could involve an obligation of
an onerous nature or magnitude, otherwise than in the ordinary course of
business;
(vii) entered into, materially varied, authorised or proposed entry
into or variation of the terms of, or made any offer (which remains open for
acceptance) to enter into or vary to a material extent the terms of any
contract, service agreement, commitment or arrangement with any director or
senior executive of any member of the Wider OnTheMarket Group, save to the
extent consistent with past practice;
(viii) established any share option scheme, incentive scheme or other
benefit in respect of the Wider OnTheMarket Group;
(ix) purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities or reduced
or made any other change to any part of its share capital (except, in each
case, where relevant, as between OnTheMarket and wholly-owned subsidiaries of
OnTheMarket or between the wholly-owned subsidiaries of OnTheMarket);
(x) waived, compromised or settled any claim other than in the
ordinary course of business;
(xi) terminated or varied the terms of any agreement or arrangement
between any member of the Wider OnTheMarket Group and any other person in a
manner which would or might reasonably be expected to have a material adverse
effect on the financial position of the Wider OnTheMarket Group, taken as a
whole;
(xii) save as required in connection with the Acquisition, made any
material alteration to its memorandum, articles of association or other
incorporation documents or any material alteration to the memorandum, articles
of association or other incorporation documents of any other member of the
Wider OnTheMarket Group;
(xiii) been unable, or admitted in writing that it is unable, to pay its
debts or commenced negotiations with one or more of its creditors with a view
to rescheduling or restructuring any of its indebtedness, or having stopped or
suspended (or threatened to stop or suspend) payment of its debts generally or
ceased or threatened to cease carrying on all or a substantial part of its
business;
(xiv) (other than in respect of a member of the Wider OnTheMarket Group
which is dormant and was solvent at the relevant time) taken or proposed any
steps, corporate action or had any legal proceedings instituted or threatened
against it in relation to the suspension of payments, a moratorium of any
indebtedness, its winding-up (voluntary or otherwise), dissolution,
reorganisation or for the appointment of a receiver, administrator, manager,
administrative receiver, trustee or similar officer of all or any material
part of its assets or revenues or any analogous or equivalent steps or
proceedings in any jurisdiction or appointed any analogous person in any
jurisdiction or had any such person appointed;
(xv) (except for transactions between OnTheMarket and its wholly-owned
subsidiaries or between the wholly-owned subsidiaries of OnTheMarket) made,
authorised, proposed or announced an intention to propose any change in its
loan capital;
(xvi) entered into, implemented or authorised the entry into, any joint
venture, asset or profit sharing arrangement, partnership or merger of
business or corporate entities; or
(xvii) otherwise than in the ordinary course of business, entered into any
agreement, arrangement, commitment or contract or passed any resolution or
made any offer (which remains open for acceptance) with respect to or
announced an intention to, or to propose to, effect any of the transactions,
matters or events referred to in this Condition (f),
in each case, which is materially adverse in the context of the Wider
OnTheMarket Group, taken as a whole;
No adverse change, litigation, regulatory enquiry or similar
(g) except as Disclosed, since 31 January 2023 there having
been:
(i) no adverse change and no circumstance having arisen which
would or might reasonably be expected to result in any adverse change in, the
business, value, assets, liabilities, shareholders' equity, financial or
trading position or profits, operational performance or prospects of any
member of the Wider OnTheMarket Group which, in each case, is material in the
context of the Wider OnTheMarket Group, taken as a whole;
(ii) no litigation, arbitration proceedings, prosecution or other
legal proceedings having been threatened in writing, announced, implemented or
instituted by or against or remaining outstanding against, any member of the
Wider OnTheMarket Group, in each case, which might reasonably be expected to
have a material adverse effect on the Wider OnTheMarket Group, taken as a
whole;
(iii) no enquiry, review or investigation by any Third Party against
or in respect of any member of the Wider OnTheMarket Group (or any person in
respect of which any such member has responsibility or liability) having been
threatened in writing, announced, implemented or instituted or remaining
outstanding against or in respect of any member of the Wider OnTheMarket
Group, in each case, which might reasonably be expected to have a material
adverse effect on the Wider OnTheMarket Group, taken as a whole;
(iv) no contingent or other liability having arisen or become
apparent to Bidco or increased other than in the ordinary course of business
which is reasonably likely to affect adversely the business, assets, financial
or trading position, profits or operational performance of any member of the
Wider OnTheMarket Group to an extent which is material in the context of the
Wider OnTheMarket Group, taken as a whole;
(v) no steps having been taken and no omissions having been made
which result in the withdrawal, cancellation, termination or modification of
any licence held by any member of the Wider OnTheMarket Group which is
necessary for the proper carrying on of its business and the withdrawal,
cancellation, termination or modification of which would reasonably be
expected to have a material adverse effect on the Wider OnTheMarket Group,
taken as a whole; and
(vi) no member of the Wider OnTheMarket Group having conducted its
business in material breach of any applicable laws and regulations which, in
any case, is material in the context of the Wider OnTheMarket Group, taken as
a whole; and
No discovery of certain matters regarding information and liabilities,
corruption, intellectual property and environmental liabilities
(h) except as Disclosed, Bidco not having
discovered that:
(i) any financial, business or other information concerning the
Wider OnTheMarket Group announced publicly and delivered by or on behalf of
OnTheMarket through a Regulatory Information Service prior to the date of this
Announcement is misleading, contains a misrepresentation of any fact, or omits
to state a fact necessary to make that information not misleading, in any such
case which is material in the context of the Wider OnTheMarket Group, taken as
a whole;
(ii) any member of the Wider OnTheMarket Group, otherwise than in
the ordinary course of business, is subject to any liability, contingent or
otherwise, and which is material in the context of the Wider OnTheMarket
Group, taken as a whole;
(iii) any past or present member, director, officer or employee of
the Wider OnTheMarket Group, or any other person for whom any such person is
legally liable or responsible, has, in a manner that would cause any member of
the Wider OnTheMarket Group to be liable for such actions, not complied with
the OECD Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions and any laws implementing the same, the UK
Bribery Act 2010 and/or the US Foreign Corrupt Practices Act of 1977;
(iv) any past or present member, director, officer or employee of
the Wider OnTheMarket Group, or any other person for whom any such person is
legally liable or responsible, has, in a manner that would cause any member of
the Wider OnTheMarket Group to be liable for such actions, engaged in any
business with or made any investment in, or made any payments to: (A) any
government, entity or individual with which US or EU persons are prohibited
from engaging in activities or doing business by US or EU laws or regulations,
including the economic sanctions administered by the United States Office of
Foreign Assets Control or HM Treasury & Customs, or (B) any government,
entity or individual targeted by any of the economic sanctions of the United
Nations or the European Union or any of their respective member states;
(v) any asset of any member of the Wider OnTheMarket Group
constitutes criminal property as defined by section 340(3) of the Proceeds of
Crime Act 2002 (but disregarding paragraph (b) of that definition);
(vi) no circumstance having arisen or event having occurred in
relation to any intellectual property owned, used or licensed by the Wider
OnTheMarket Group, including: (A) any member of the Wider OnTheMarket Group
losing its title to any intellectual property or any intellectual property
owned by the Wider OnTheMarket Group being revoked, cancelled or declared
invalid, (B) any agreement regarding the use of any intellectual property
licensed to or by any member of the Wider OnTheMarket Group being terminated
or varied, or (C) any claim being filed suggesting that any member of the
Wider OnTheMarket Group infringed the intellectual property rights of a third
party or any member of the Wider OnTheMarket Group being found to have
infringed the intellectual property rights of a third party, in each case,
which is material in the context of the Wider OnTheMarket Group, taken as a
whole; or
(vii) in relation to any release, emission, accumulation, discharge,
disposal or other similar circumstance which has impaired or is likely to
impair the environment (including property) or harmed or is likely to harm the
health of humans, animals or other living organisms or eco-systems, any past
or present member of the Wider OnTheMarket Group, in a manner or to an extent
which would or might reasonably be expected to cause any member of the Wider
OnTheMarket Group to be liable for such actions and is material in the context
of the Wider OnTheMarket Group, taken as a whole: (A) has committed any
violation of any applicable laws, statutes, regulations, Authorisations,
notices or other requirements of any Third Party giving rise to a material
liability; and/or (B) has incurred any material liability (whether actual or
contingent) to any Third Party; and/or (C) is likely to incur any material
liability (whether actual or contingent), or is required, to make good,
remediate, repair, re-instate or clean up the environment (including any
property) in each case of (A), (B) or (C) which such liability or requirement
would be material to the Wider OnTheMarket Group, taken as a whole.
Part B: Waiver and invocation of the Conditions
1. Subject to the requirements of the Takeover Panel, Bidco
reserves the right in its sole discretion to waive, in whole or in part:
(a) all or any of the Conditions set out in Part A of this
Appendix I except Conditions 1, 2(a)(i), 2(b)(i) and 2(c)(i) which cannot be
waived; and
(b) the deadlines in any of Conditions 2(a)(ii), 2(b)(ii) and
2(c)(ii). If such deadline is not met, Bidco shall make an announcement by
8.00 a.m. on the Business Day following such deadline confirming whether it
has invoked or waived the relevant Condition, or agreed with OnTheMarket to
extend the relevant deadline.
2. The Conditions set out in paragraphs 2 and 3 (inclusive) of
Part A of this Appendix I must be fulfilled or waived (to the extent capable
of waiver) by no later than the appointed time of the Sanction Hearing. The
Acquisition will lapse if it does not become Effective by 23:59 p.m. on the
Long Stop Date. Bidco shall be under no obligation to waive (if capable of
waiver), to determine to be or remain satisfied or treat as fulfilled any of
Conditions 3(a) to 3(h) of Part A of this Appendix I by a date earlier than
the latest date for the fulfilment or waiver of that Condition specified
above, notwithstanding that the other Conditions may at such earlier date have
been waived or fulfilled and that there are, at such earlier date, no
circumstances indicating that any Condition may not be capable of fulfilment.
3. Subject to paragraph 4 below, under Rule 13.5(a) of the
Code, Bidco may only invoke a Condition so as to cause the Acquisition and/or
the Scheme not to proceed, to lapse or to be withdrawn with the consent of the
Takeover Panel. The Takeover Panel will normally only give its consent if the
circumstances which give rise to the right to invoke the Condition are of
material significance to Bidco in the context of the Acquisition. This will be
judged by reference to the facts of each case at the time that the relevant
circumstances arise.
4. Conditions 1 and 2 of Part A of this Appendix I (and any
Takeover Offer acceptance condition adopted on the basis specified in Part C
of this Appendix I) will not be subject to Rule 13.5(a) of the Code.
5. If the Takeover Panel requires Bidco to make an offer or
offers for any OnTheMarket Shares under the provisions of Rule 9 of the Code,
Bidco may make such alterations to the Conditions as are necessary to comply
with the provisions of that Rule.
6. Each of the Conditions shall be regarded as a separate
Condition and shall not be limited by reference to any other Condition.
Part C: Implementation by way of a Takeover Offer
Bidco reserves the right to elect (with the consent of the Takeover Panel, if
required) to implement the Acquisition by way of a Takeover Offer as an
alternative to the Scheme. In such event, the Takeover Offer will be
implemented on the same terms and conditions, so far as applicable, as those
which would apply to the Scheme (subject to appropriate amendments for an
acquisition being made by way of a Takeover Offer). The acceptance condition
would be set at 90 per cent. of the shares to which such Takeover Offer
relates (or such lesser percentage, being more than 50 per cent., as Bidco may
decide with the consent of the Takeover Panel).
Part D: Certain further terms of the Acquisition
1. Bidco reserves the right to implement the Acquisition
through any other entity owned by CoStar from time to time.
2. The OnTheMarket Shares shall be acquired by Bidco fully
paid and free from all liens, equitable interests, charges, encumbrances,
rights of pre-emption and any other third party rights and interests
whatsoever and together with all rights existing at the Announcement Date or
thereafter attaching thereto, including (without limitation) the right to
receive and retain, in full, all dividends and other distributions (if any)
declared, made, paid or payable or any other return of capital or value
(whether by way of reduction of share capital or share premium account or
otherwise) made in each case by reference to a record date falling on or after
the Effective Date.
3. If, on or after the Announcement Date and before the
Effective Date, any dividend and/or distribution and/or other return of
capital or value is authorised, announced, declared, made or paid or becomes
payable in respect of the OnTheMarket Shares, and with a record date on or
prior to the Effective Date, Bidco reserves the right to reduce the
consideration payable under the Acquisition in respect of each OnTheMarket
Share by the aggregate amount of all or part of any such dividend and/or other
distribution and/or other return of capital or value, except where OnTheMarket
Shares are or will be acquired pursuant to the Acquisition on a basis which
entitles Bidco to receive such dividend and/or other distribution and/or other
return of capital or value, provided that, to the extent that such dividend or
distribution or other return of capital or value is cancelled, the
Consideration will not be subject to change. If Bidco exercises this right or
makes such a reduction in respect of a dividend or other distribution,
OnTheMarket Shareholders will be entitled to receive and retain that dividend
or other distribution. Any exercise by Bidco of its rights referred to in this
paragraph 3 shall be the subject of an announcement and, for the avoidance of
doubt, shall not be regarded as constituting any revision or variation of the
Acquisition.
4. The availability of the Acquisition to persons not resident
in the United Kingdom may be affected by the laws of relevant jurisdictions.
Therefore, any persons who are subject to the laws of any jurisdiction other
than the United Kingdom and any OnTheMarket Shareholders who are not resident
in the United Kingdom will need to inform themselves about and observe any
applicable requirements.
5. Unless otherwise determined by Bidco or required by the
Code and permitted by applicable law and regulations, the Acquisition is not
being, and will not be, made, directly or indirectly, in, into or by the use
of the mails of, or by any other means or instrumentality (including, but not
limited to, facsimile, e-mail or other electronic transmission, telex or
telephone) of interstate or foreign commerce of, or of any facility of a
national, state or other securities exchange of, any Restricted Jurisdiction
and will not be capable of acceptance by any such use, means, instrumentality
or facility or from within any Restricted Jurisdiction.
6. The Acquisition will be subject, amongst other things, to
the Conditions and certain further terms which are set out in this Appendix I
and those terms which will be set out in the Scheme Document and will be
subject to the applicable requirements of, and such further terms as may be
required to comply with, the AIM Rules and the provisions of the Code and any
requirement of the Takeover Panel, the London Stock Exchange, the FCA and the
Registrar of Companies.
7. This Announcement and any rights or liabilities arising
hereunder, the Acquisition, the Scheme and the Forms of Proxy will be governed
by English law and will be subject to the jurisdiction of the English courts.
APPENDIX II
SOURCES OF INFORMATION AND BASES OF CALCULATION
1. As at the close of business on the Last Practicable Date,
OnTheMarket had in issue 80,207,785 ordinary shares of 0.2 pence each. The
ISIN for the OnTheMarket Shares is GB00BFN3K335.
2. The fully diluted ordinary share capital of OnTheMarket as
at the Last Practicable Date is based upon:
(a) 80,207,785 OnTheMarket Shares in issue as at the close of business on the Last Practicable Date;
(b) a maximum of an additional 9,070,842 OnTheMarket Shares that may be issued on or after the date of this Announcement to satisfy the exercise of options under the OnTheMarket Share Plans, less 807,031 OnTheMarket Shares held by the trustee of the OnTheMarket Employee Benefit Trust which can be used to satisfy the exercise of options under the OnTheMarket Share Plans; and
(c) a maximum of an additional 1,541,496 OnTheMarket Shares that may be issued on or after the date of this Announcement in accordance with, OnTheMarket Agent Share Incentive Contracts.
3. The value attributed to the entire issued and to be issued
ordinary share capital of OnTheMarket is calculated based on the cash
consideration payable by Bidco to OnTheMarket Shareholders under the terms of
the Acquisition of 110 pence for each Scheme Share, multiplied by the fully
diluted share capital of OnTheMarket set out in paragraph 2 above.
4. All percentages of OnTheMarket's issued share capital are
stated as at close of business on the Last Practicable Date and are based on
the 80,207,785 OnTheMarket Shares in issue as at the close of business on the
Last Practicable Date.
5. Unless otherwise stated, financial information relating to
OnTheMarket has been extracted from the audited consolidated financial
statements of OnTheMarket for the financial year ended 31 January 2023 or the
unaudited interim results of OnTheMarket for the six months ended 31 July 2023
(as applicable).
6. Unless otherwise stated, all prices for OnTheMarket Shares
are the relevant Closing Price for the OnTheMarket Shares as at the relevant
date.
7. The Volume Weighted Average Prices are derived from
Bloomberg data and have been rounded to the nearest two decimal places.
8. Rightmove plc's annual marketing spend is taken from the
transcript of its half year results 2023 earnings call which reported £15 to
15.5 million in overall marketing budget.
APPENDIX III
DETAILS OF IRREVOCABLE UNDERTAKINGS and letters of intent
Bidco has received irrevocable undertakings and letters of intent to vote (or
procure the voting) in favour of the Scheme at the Court Meeting and
Resolution(s) at the General Meeting (or, if Bidco exercises its right to
implement the Acquisition by way of a Takeover Offer, to accept, or procure
the acceptance of, such Takeover Offer) in respect of 23,665,922 OnTheMarket
Shares (representing, in aggregate, approximately 29.51 per cent. of the
OnTheMarket Shares in issue on the Last Practicable Date), comprising the
following:
OnTheMarket Directors' irrevocable undertakings
Name Number of OnTheMarket Shares in respect of which the undertaking is given Percentage of OnTheMarket's issued share capital
Christopher Bell 44,588 0.06%
Rupert Sebag-Montefiore 31,948 0.04%
Jason Tebb 18,180 0.02 %
Helen Whiteley 90,909 0.11%
Total 185,625 0.23%
Ian Francis and Thomas Carter do not hold any OnTheMarket Shares and therefore
have not given irrevocable undertakings.
These irrevocable undertakings also extend to any shares acquired by the
relevant OnTheMarket Directors, whether as a result of vesting of awards or
the exercise of options under the OnTheMarket Share Plans or otherwise.
The obligations of the OnTheMarket Directors under the irrevocable
undertakings shall lapse and cease to have effect in the following
circumstances:
(a) if Bidco announces, with the consent of the Panel, that it does not intend to proceed with the Acquisition and no new, revised or replacement Scheme or Takeover Offer to implement the Acquisition is announced by Bidco within five Business Days of such announcement;
(b) on the date on which any competing offer for the issued and to be issued ordinary share capital of OnTheMarket is declared wholly unconditional (if implemented by way of a takeover offer) or otherwise becomes effective (if implemented by way of a scheme);
(c) if the Scheme (or Takeover Offer, as applicable) lapses or is withdrawn in accordance with its terms and no new, revised or replacement Scheme or Takeover Offer to implement the Acquisition has been announced by Bidco within five Business Days of such lapse or withdrawal; or
(d) on the Long Stop Date unless, on such date, Bidco is bound to make or has made a Takeover Offer that remains open for acceptance in accordance with the Code.
These irrevocable undertakings remain binding in the event of a competing
offer.
Other OnTheMarket Shareholders' irrevocable undertakings
Name Number of OnTheMarket Shares Per cent. of OnTheMarket Shares in issue
Downing LLP 1,681,897 2.10%
Downing Strategic Micro-Cap Investment Trust Plc 2,489,500 3.10%
Harwood Capital LLP 2,200,000 2.74%
Harwood Capital Management (Gibraltar) Limited 4,500,000 5.61%
Jason Walker 3,120,626 3.89%
Spicerhaart Group Limited 1,606,628 2.00%
Total 15,598,651 19.45%
The irrevocable undertakings from Harwood shall lapse and cease to have effect
in the following circumstances:
(a) if a competing offer has been announced pursuant to Rule 2.7 of the Code not later than 12 noon on the 40th day following the posting of the Scheme Document or Offer Document (as applicable) pursuant to which the consideration offered for each OnTheMarket Share is in cash and is greater than 120 pence, and Bidco has not announced a revision to the Acquisition with a value which is, in Bidco's reasonable opinion, equal to or in excess of the amount of such competing proposal;
(b) in respect of any OnTheMarket Shares which have been disposed of after the date of the irrevocable undertaking;
(c) if the Scheme Document has not been posted within 28 days of the Announcement Date (or such longer period as Bidco, with the consent of the Panel, determines), save that if Bidco elects to implement the Acquisition by way of a Takeover Offer, such period shall be extended to refer to 28 days of the date of the announcement of such switch;
(d) the Scheme (or Takeover Offer, as applicable) lapses or is withdrawn in accordance with its terms (save where in connection with a switch);
(e) if the Acquisition has not become Effective by the Long Stop Date;
(f) Bidco announces that it does not intend to proceed with the Acquisition and no new, revised or replacement scheme or offer is announced at the same time; or
(g) the undertaking is required to be withdrawn by a court or regulator of competent jurisdiction.
The irrevocable undertakings from Downing, Spicerhaart Group Limited and Jason
Walker shall lapse and cease to have effect in the following circumstances:
(a) Bidco announces, with the consent of the Panel and before the scheme or offer document in connection with the Acquisition is published, that it does not intend to proceed with the Acquisition and no new, revised or replacement scheme or offer is announced within 10 Business Days of such announcement;
(b) the Scheme (or Takeover Offer, as applicable) lapses or is withdrawn in accordance with its terms and no new, revised or replacement Scheme or Takeover Offer to implement the Acquisition has been announced within 10 Business Days of such lapse or withdrawal; or
(c) if any competing offer for the issued and to be issued ordinary share capital of OnTheMarket is made which is declared wholly unconditional (if implemented by way of a takeover offer) or otherwise becomes effective (if implemented by way of a scheme).
In addition to the circumstances set out above, the irrevocable undertakings
from Downing shall lapse and cease to have effect if a third party announces a
firm intention to make a competing offer which provides for consideration of
not less than five per cent. greater than that offered under the Acquisition
and Bidco does not increased the consideration offered under the Acquisition
to an amount equal to or greater than such consideration within 10 Business
Days of the announcement of such competing proposal.
The irrevocable undertakings from Spicerhaart Group Limited and Jason Walker
shall remain binding in the event of a competing offer.
The fulfilment of Spicerhaart Group Limited's undertaking to vote in favour of
the Scheme or accept a Takeover Offer is subject to obtaining consent under an
existing debenture, and Spicerhaart Group Limited has agreed to use all
reasonable endeavours to obtain such consent as soon as possible after the
Announcement Date.
Letters of intent
Name Number of OnTheMarket shares Per cent. of OnTheMarket Shares in issue
Herald Investment Management Limited 2,433,888 3.03%
Schroder Investment Management Limited 5,447,758 6.79%
Total 7,881,646 9.83%
APPENDIX IV
DEFINITIONS
In this Announcement, the following words and expressions have the following
meanings, unless the context requires otherwise:
Acquisition the recommended acquisition by Bidco of the entire issued and to be issued
ordinary share capital of OnTheMarket to be effected by means of the Scheme
(or by way of a Takeover Offer under certain circumstances described in this
Announcement) on the terms and subject to the conditions set out in the Scheme
Document and, in either case, where the context admits, any subsequent
variation, revision, extension or renewal thereof;
AIM AIM, the market of that name operated by the London Stock Exchange;
AIM Rules the AIM Rules for Companies published by the London Stock Exchange, as amended
from time to time;
Amended OnTheMarket Articles the articles of association of OnTheMarket as at the Announcement Date, as
amended to incorporate provisions requiring, amongst other things, any
OnTheMarket Shares issued after the Scheme Record Time (other than to Bidco
and/or its nominees) to be automatically transferred to Bidco on the same
terms as the Acquisition (other than to timings and formalities), such
proposed amendments to be set out in full in the notice of the General
Meeting;
Announcement this announcement of the Acquisition made in accordance with Rule 2.7 of the
Code;
Announcement Date the date of this Announcement;
Authorisations regulatory authorisations, orders, recognitions, grants, consents, clearances,
confirmations, certificates, licences, permissions, determinations, exemptions
or approvals;
Bidco CoStar UK Limited, a private limited company incorporated in England and Wales
with registered number 01789170 and whose registered office is at 26th Floor,
The Shard, 32 London Bridge Street, London SE1 9SG;
Business Day a day, other than a Saturday, Sunday, public holiday or bank holiday, on which
banks are generally open for normal business in the City of London;
Closing Price the closing middle market quotation for an OnTheMarket Share as derived from
the AIM Appendix to the Daily Official List on that day;
Code the City Code on Takeovers and Mergers;
Companies Act the UK Companies Act 2006, as amended;
Conditions the conditions to the Acquisition, which are set out in Appendix I to this
Announcement and will be set out in the Scheme Document;
Confidentiality Agreement has the meaning given to it in paragraph 13 of this Announcement;
CoStar CoStar Group, Inc.;
CoStar Group CoStar and its subsidiaries and subsidiary undertakings;
Court the High Court of Justice in England and Wales;
Court Meeting the meeting or meetings of the Scheme Shareholders (or the relevant class or
classes thereof) to be convened by order of the Court pursuant to section 896
of the Companies Act to consider and, if thought fit, approve the Scheme (with
or without modification), including any adjournment, postponement or
reconvening thereof, notice of which is to be contained in the Scheme
Document;
Court Order the order of the Court sanctioning the Scheme under section 899 of the
Companies Act;
CREST the system for the paperless settlement of trades in securities and the
holding of uncertificated securities of which Euroclear UK & International
Limited is the Operator (as defined in the Regulations);
Daily Official List the Daily Official List of the London Stock Exchange;
Dealing Disclosure has the same meaning as in Rule 8 of the Code;
Disclosed the information which has been disclosed: (a) by or on behalf of OnTheMarket
to Bidco or any other member of the Wider CoStar Group (or their respective
officers, employees agents or advisers) on or before the Announcement Date;
(b) in the annual report and accounts of the OnTheMarket Group for the
financial year ended 31 January 2023; (c) in filings made with the Registrar
of Companies and appearing on OnTheMarket's file at Companies House within the
two years ending on the Announcement Date; (d) in a public announcement to a
Regulatory Information Service made by OnTheMarket prior to the Announcement
Date; or (e) in this Announcement;
Disclosure Table the disclosure table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk (http://www.thetakeoverpanel.org.uk) ;
Downing Downing LLP and Downing Strategic Micro-Cap Investment Trust Plc;
Effective in the context of the Acquisition: (a) if the Acquisition is implemented by
way of a Scheme, the Scheme having become effective in accordance with its
terms, upon the delivery of the Court Order to the Registrar of Companies; or
(b) if the Acquisition is implemented by way of a Takeover Offer, the Takeover
Offer having been declared, or become, unconditional in all respects in
accordance with the requirements of the Code;
Effective Date the date upon which the Acquisition becomes Effective;
Excluded Shares any OnTheMarket Shares: (a) registered in the name of, or beneficially owned
by, Bidco or any member of the Wider CoStar Group or their respective
nominees; or (b) held in treasury by OnTheMarket;
FCA the UK Financial Conduct Authority or its successor from time to time;
Forms of Proxy the forms of proxy in connection with the Court Meeting and the General
Meeting, respectively, which will accompany the Scheme Document;
FSMA the Financial Services and Markets Act 2000, as amended from time to time;
General Meeting the general meeting of OnTheMarket Shareholders to be convened in connection
with the Scheme for the purpose of considering and, if thought fit, approving
the Resolution(s) (with or without amendment), including any adjournment,
postponement or reconvening thereof, notice of which shall be contained in the
Scheme Document;
Goldman Sachs Goldman Sachs International and Goldman Sachs and Co. LLC;
Governmental Entity any supranational, national, state, municipal, local or foreign government,
any minister or instrumentality, subdivision, court or tribunal, arbitrator or
arbitrator panel, regulatory or administrative agency or commission, or other
authority thereof, or any regulatory or quasi-regulatory organisation or
private body exercising any regulatory, taxing, importing or other
governmental or quasi-governmental authority;
Harwood Harwood Capital LLP and Harwood Capital Management (Gibraltar) Limited;
IPO initial public offering;
ISIN International Securities Identification Number;
Last Practicable Date 18 October 2023, the Business Day prior to the Announcement Date;
London Stock Exchange London Stock Exchange Group plc;
Long Stop Date 30 April 2024 (or such later date (if any) as Bidco and OnTheMarket may, agree
and (if required) the Takeover Panel and the Court may approve);
Market Abuse Regulation Regulation (EU) No. 596/2014, as it forms part of the domestic law of the
United Kingdom by virtue of the European Union (Withdrawal) Act 2018, as
amended from time to time;
NASDAQ the NASDAQ Global Select Market, or any successor stock market or exchange
operated by NASDAQ, Inc., or any successor thereto;
Offer Period the period commencing on the Announcement Date and ending on: (a) the earlier
of the date on which the Scheme becomes Effective and/or the date on which the
Scheme lapses or is withdrawn (or such other date as the Takeover Panel may
decide); or (b) the earlier of the date on which the Takeover Offer has become
or has been declared unconditional as to acceptances and/or the date on which
the Takeover Offer lapses or is withdrawn (or such other date as the Takeover
Panel may decide), other than (in the case of (a)) where such lapsing or
withdrawal is a result of Bidco exercising its right to implement the
Acquisition by way of a Takeover Offer;
OnTheMarket OnTheMarket plc, a public limited company incorporated in England and Wales
with registered number 10887621 and whose registered office is at C/O
Almond+Co, 11 York Street, Manchester M2 2AW;
OnTheMarket Agent Share Incentive Listing Contracts a portal listing contract between an agent and Agents' Mutual Limited, a
wholly-owned subsidiary of OnTheMarket, pursuant to which Agents' Mutual
Limited may, in its discretion, procure the issuance of OnTheMarket Shares to
such agent as an incentivisation arrangement;
OnTheMarket Directors the directors of OnTheMarket from time to time;
OnTheMarket Group OnTheMarket and its subsidiaries and subsidiary undertakings;
OnTheMarket Share Award an option to acquire OnTheMarket Shares granted pursuant to the OnTheMarket
Share Plans;
OnTheMarket Share Plans means:
(i) the OnTheMarket Management Incentive Plan;
(ii) the OnTheMarket Option Plan 2017;
(iii) the OnTheMarket plc Company Share Option Plan 2018;
(iv) the OnTheMarket PLC Deferred Bonus Plan 2019; and
(v) the OnTheMarket Savings Related Share Option Scheme;
OnTheMarket Shareholders the holders of OnTheMarket Shares;
OnTheMarket Shares the ordinary shares of 0.2 pence each in the capital of OnTheMarket;
Opening Position Disclosure has the same meaning as in Rule 8 of the Code;
Overseas Shareholders OnTheMarket Shareholders (or nominees of, or custodians or trustees for
OnTheMarket Shareholders) not resident in, or nationals or citizens of, the
United Kingdom;
Registrar of Companies the Registrar of Companies in England and Wales;
Regulations the Uncertificated Securities Regulations 2001 (SI 2001/3755);
Regulatory Information Service a service approved by the London Stock Exchange for the distribution to the
public of announcements and included within the list maintained on the London
Stock Exchange's website;
relevant securities relevant securities (as defined in the Code);
Resolution(s) the special resolution(s) related to the Acquisition to be proposed at the
General Meeting to implement the Scheme, including, amongst other things, to
approve the Scheme, adopt the Amended OnTheMarket Articles and such other
matters as may be necessary to implement the Acquisition;
Restricted Jurisdiction any jurisdiction where local laws or regulations may result in a significant
risk of civil, regulatory or criminal exposure if information concerning the
Acquisition is sent or made available in that jurisdiction;
Sanction Hearing the hearing of the Court at which the Court Order is sought and, if such
hearing is adjourned, references to the commencement of any such hearing shall
mean the commencement of the final adjournment thereof;
Scheme the proposed scheme of arrangement under Part 26 of the Companies Act to
effect the Acquisition between OnTheMarket and the Scheme Shareholders (the
full terms of which will be set out in the Scheme Document), with or subject
to any modification, addition or condition which the Court may approve or
impose and OnTheMarket and Bidco may agree;
Scheme Document the document to be sent to (amongst others) OnTheMarket Shareholders
containing, amongst other things, the Scheme, the terms and conditions
applicable to the Scheme and the notices convening the Court Meeting and the
General Meeting;
Scheme Record Time the time and date to be specified in the Scheme Document;
Scheme Shareholders holders of Scheme Shares;
Scheme Shares the OnTheMarket Shares:
(a) in issue at the date of the Scheme Document;
(b) (if any) issued after the date of the Scheme Document and prior to
the Voting Record Time; and
(c) (if any) issued at or after the Voting Record Time but at or
before the Scheme Record Time either on the terms that the original or any
subsequent holder thereof is bound by the Scheme or in respect of which their
holders are, or shall have agreed in writing to be, bound by the Scheme,
in each case other than any Excluded Shares;
Shore Capital Shore Capital and Corporate Limited and/or Shore Capital Stockbrokers Limited,
as the context requires;
Substantial Interest in relation to an undertaking, a direct or indirect interest of 20 per cent.
or more of the total voting rights conferred by the equity share capital (as
defined in section 548 of the Companies Act) of such undertaking;
Takeover Offer should the Acquisition be implemented by way of a takeover offer (as defined
in section 974 of the Companies Act 2006), the offer to be made by or on
behalf of Bidco to acquire the entire issued and to be issued ordinary share
capital of OnTheMarket and, where the context requires, any subsequent
revision, variation, extension or renewal of such offer and includes any
election available thereunder;
Takeover Panel the UK Panel on Takeovers and Mergers;
Third Party each of a central bank, government or governmental, quasi-governmental,
supranational, statutory, regulatory or investigative body or authority
(including any antitrust or merger control authority), court, trade agency,
professional association, institution, works council, employee representative
body or any other similar body or person whatsoever in any jurisdiction;
United Kingdom or UK the United Kingdom of Great Britain and Northern Ireland;
United States or US the United States of America, its territories and possessions, all areas
subject to its jurisdiction or any subdivision thereof, any state of the
United States of America and the District of Columbia and all other areas
subject to its jurisdiction and any political sub-division thereof;
US Exchange Act the United States Securities Exchange Act of 1934 and the rules and
regulations promulgated thereunder;
Volume Weighted Average Price the volume weighted average of the per share trading prices of OnTheMarket
Shares on the London Stock Exchange as reported through Bloomberg;
Voting Record Time the date and time to be specified in the Scheme Document by reference to which
entitlements to vote at the Court Meeting will be determined;
Wider OnTheMarket Group OnTheMarket, its subsidiary undertakings, associated undertakings and any
other undertaking, body corporate, partnership, joint venture or person in
which OnTheMarket and/or such undertakings (aggregating their interests) have
a direct or indirect Substantial Interest or the equivalent;
Wider CoStar Group CoStar and its other subsidiary undertakings (including Bidco), associated
undertakings and any other body corporate partnership, joint venture or person
in which CoStar, Bidco and/or such undertakings (aggregating their interests)
have direct or indirect Substantial Interest or the equivalent (excluding, for
the avoidance of doubt, any member of the Wider OnTheMarket Group); and
Zeus Zeus Capital Limited.
In this Announcement:
(a) all times referred to are to London time unless otherwise
stated;
(b) all references to £ or pence are to the lawful currency of
the United Kingdom;
(c) all references to $ are to are to the lawful currency of the
United States;
(d) references to the singular include the plural and vice versa,
unless the context otherwise requires;
(e) "subsidiary", "subsidiary undertaking" and "undertaking"
have the meanings given by the Companies Act and "associated undertaking" has
the meaning given to it by paragraph 19 of Schedule 6 of the Large and
Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008,
other than paragraph 1(b) thereof which shall be excluded for this purpose;
and
(f) all references to statutory provision or law or to any order
or regulation shall be construed as a reference to that provision, law, order
or regulation as extended, modified, replaced or re-enacted from time to time
and all statutory instruments, regulations and orders from time to time made
thereunder or deriving validity therefrom.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END OFFFFUSFUEDSELSRecent news on OnTheMarket
See all newsREG - AIM OnTheMarket plc - Cancellation - OnTheMarket plc
AnnouncementREG - OnTheMarket plc - Scheme of arrangement becomes effective
AnnouncementREG - AIM OnTheMarket plc - Suspension - OnTheMarket plc
AnnouncementREG - AIM - AIM Notice - 11/12/2023
AnnouncementREG - OnTheMarket plc - Court Sanction, Exercise of Options and Rule 2.9
Announcement