TIDMCSGP TIDMOTMP
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
RECOMMED 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 GBP99
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
GBP8 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) Tel: +1 212 902 1000
Barry O'Brien Tel: +44 20 7774 1000
Warren Stables Tel: +1 212 902 1000
Tim Creamer
OnTheMarket Tel: +44 20 7353 4200
Jason Tebb
Tom Carter
Zeus (Rule 3 adviser, joint financial Tel: +44 20 3829 5000
adviser, nominated adviser and joint corporate
broker to OnTheMarket)
Jamie Peel
Benjamin Robertson
James Hornigold
Shore Capital (joint financial adviser Tel: +44 20 7408 4090
and joint corporate broker to 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 nancial, 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 ,
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
RECOMMED 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 GBP99
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
GBP30 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 GBP16.0 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 GBP34.4 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 GBP46.5 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
GBP46.5 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 GBP46.5 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) Tel: +1 212 902 1000
Barry O'Brien Tel: +44 20 7774 1000
Warren Stables Tel: +1 212 902 1000
Tim Creamer
OnTheMarket Tel: +44 20 7353 4200
Jason Tebb
Tom Carter
Zeus (Rule 3 adviser, joint financial Tel: +44 20 3829 5000
adviser, nominated adviser and joint corporate
broker to OnTheMarket)
Jamie Peel
Benjamin Robertson
James Hornigold
Shore Capital (joint financial adviser Tel: +44 20 7408 4090
and joint corporate broker to 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 nancial, 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 ,
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.
APPIX 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.
APPIX 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 GBP15 to 15.5 million in overall marketing budget.
APPIX 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
Number of OnTheMarket
Shares in respect of
which the undertaking Percentage of OnTheMarket's
Name is given 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
Number of OnTheMarket Per cent. of OnTheMarket
Name Shares 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
Number of OnTheMarket Per cent. of OnTheMarket
Name shares 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%
APPIX 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 ;
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 GBP 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 or visit 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.
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END
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October 19, 2023 02:05 ET (06:05 GMT)
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