REG - OnTheMarket plc - Glass Lewis recommends vote for acquisition

OnTheMarketAnnouncement

28/11/2023 07:00

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RNS Number : 8317U  OnTheMarket plc  28 November 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

 

FOR IMMEDIATE RELEASE

28 November 2023

 

ONTHEMARKET PLC

("OnTheMarket" or the "Company")

 

Independent proxy advisor Glass Lewis joins ISS in recommending shareholders
vote "FOR" the acquisition of OnTheMarket PLC by CoStar UK Limited

 

OnTheMarket notes the positive voting recommendation published yesterday by
independent proxy advisers Glass Lewis & Co. ("Glass Lewis") in relation
to the Company's forthcoming Court Meeting and General Meeting to be held on 4
December 2023, to approve the acquisition of OnTheMarket by CoStar UK Limited
("CoStar"). This is in addition to the positive voting recommendation already
published by Institutional Shareholder Services Inc ("ISS").

 

Glass Lewis recommends that OnTheMarket shareholders vote "FOR" the
acquisition of OnTheMarket by CoStar at the Court Meeting and General Meeting
on 4 December, supporting the Board's unanimous recommendation.

 

A Compelling Proposition for OnTheMarket Shareholders and Customers

 

The Board of OnTheMarket also reiterates its unanimous recommendation for
Shareholders to vote in favour of the Acquisition for the following reasons:

 

·    Attractive valuation for OnTheMarket Shareholders.

o  110 pence per share

o  c.56% premium to the closing price before the offer was announced

o c.94% premium to the three-month volume weighted average price before the
offer was announced

 

·    CoStar is seeking to create the number one agent-friendly UK
residential property portal and a genuine disruptor to the established market
leaders. The level of investment CoStar intends to deploy represents a
material acceleration of OnTheMarket's existing strategy in this regard.

 

·    CoStar is committed to maintaining fair and sustainable pricing for
agents and intends to continue charging agents a small proportion of
Rightmove's current charges.

 

·    CoStar will invest to grow traffic to OnTheMarket's portal, for the
benefit of OnTheMarket's agent clients.

 

·    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.

 

 

How to vote and meeting details

 

As more fully described in the Scheme Document, the Scheme will require
OnTheMarket Shareholder approval at the Court Meeting and the General Meeting
in order to become Effective.

 

The Court Meeting and the General Meeting will be held at the offices of
Eversheds Sutherland (International) LLP at One Wood Street, London, EC2V 7WS
on 4 December 2023, at 10.00 a.m. for the Court Meeting and 10.15 a.m. for the
General Meeting (or as soon as reasonably practicable after that time
following conclusion or adjournment of the Court Meeting).

 

Shareholders are strongly urged to appoint a proxy (or in the case of
OnTheMarket Nominee Service Holders, to complete their voting instruction.
This can be done in accordance with the instructions set out in the Scheme
Document.

 

Other materials related to the CoStar's recommended acquisition of OnTheMarket
are available at https://plc.onthemarket.com/recommended-cash-acquisition-docs
(https://plc.onthemarket.com/recommended-cash-acquisition-docs) .

 

Capitalised terms in this announcement, unless otherwise defined herein, have
the same meanings as set out in the Scheme Document.

 

Enquiries

 

 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

 CoStar and CoStar UK                                                        Tel: +1 202 346 6500

 Scott Wheeler

 Cyndi Eakin

 Gene Boxer

 Goldman Sachs (sole financial adviser to CoStar and CoStar UK)              Tel: +1 212 902 1000

 Barry O'Brien                                                               Tel: +44 20 7774 1000

 Warren Stables                                                              Tel: +1 212 902 1000

 Tim Creamer

 FGS Global (PR adviser to CoStar and CoStar UK)                             Tel: +44 20 7251 3801

 James Murgatroyd

 Gordon Simpson

 

Important notices

 

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.

 

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 CoStar UK 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
CoStar UK 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.

 

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.

 

This announcement does not constitute a prospectus or prospectus exempted
document.

 

The statements contained in this announcement are made as at the date of this
announcement, 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, or otherwise to provide voting
instructions in respect of the Court Meeting or the General Meeting, 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 CoStar UK 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, CoStar UK 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 CoStar UK 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
CoStar UK and no one else.

 

In addition to any such Takeover Offer, CoStar UK, certain affiliated
companies and the nominees or brokers (acting as agents) of CoStar UK 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 are contained in the
Scheme Document.

 

Forward-looking statements

 

This announcement may contain certain "forward-looking statements" with
respect to OnTheMarket, CoStar UK 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, CoStar
UK 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, CoStar UK 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,
CoStar UK 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, CoStar UK 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, CoStar UK 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/
(https://plc.onthemarket.com/recommended-cash-acquisition/) by no later than
12:00 noon on the Business Day following the date of this announcement.
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 0321 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. 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.

 

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.

 

General

 

CoStar UK reserves the right to elect, with the consent of the Panel (where
necessary), to implement the Acquisition by way of a Takeover Offer for the
entire issued and to be issued share capital of OnTheMarket not already held
by CoStar UK as an alternative to the Scheme. In such an event, a Takeover
Offer will be implemented on substantially the same terms, so far as
applicable, as those which would apply to the Scheme.

 

If the Acquisition is effected by way of Takeover Offer, and such Takeover
Offer becomes or is declared unconditional in all respects and sufficient
acceptances are received, CoStar UK intends to exercise its rights to apply
the provisions of Chapter 3 of Part 28 of the Companies Act so as to acquire
compulsorily the remaining OnTheMarket Shares in respect of which the Takeover
Offer has not been accepted.

 

If you are in any doubt about the contents of this announcement or the action
you should take, you are recommended to seek your own independent financial
advice immediately from your stockbroker, bank manager, solicitor or
independent financial adviser duly authorised under the Financial Services and
Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if
not, from another appropriately authorised independent financial adviser.

 

If you have any questions about this announcement, the Scheme Document, the
Meetings or how to complete the Forms of Proxy or to appoint a proxy through
Proxymity or via the CREST electronic proxy appointment service or otherwise
or, if you are an OnTheMarket Nominee Service Holder, how to complete the
Forms of Instruction or submit your voting instructions electronically, please
contact Link Group via email at shareholderenquiries@linkgroup.co.uk or on +44
(0) 371 664 0321. 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. Lines are open between 9.00 a.m. to 5.30 p.m.,
Monday to Friday, excluding public holidays in England and Wales. The helpline
cannot provide advice on the merits of the Acquisition nor give any financial,
legal or tax advice.

 

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