OnTheMarket (OTMP) Shares Surged 54% on £99M Takeover Offer

The OnTheMarket plc (LON: OTMP) share price surged 53.6% after receiving an offer from CoStar UK Limited (Bidco), a wholly-owned indirect subsidiary of CoStar Group, Inc., to purchase its outstanding shares for 110p each.

The rally higher was expected given the significant premium offered by CoStar Bidco in its offer for OnTheMarket plc. The price per share offered of 110p represented a 56% premium to OnTheMarket’s closing price of 70.50 on 18 October 2023, the last Business Day before the Announcement Date. 

OnTheMarket is a valuable asset, firmly established and uniquely positioned in the UK market. With a digital platform that boasts strong customer relationships and a robust flow of web traffic, this strategic acquisition by CoStar opens up new avenues for the company to expedite its international expansion endeavours across the UK and Europe.

OnTheMarket also released its interim results for the six months ended 31 July 2023. The company revealed that its group revenues rose by 1% to £16.9 million from £16.8 million in a similar period last year. 

The new homes revenues showed an impressive growth of 26% from last year, boosted by the rise in advertiser numbers and Average Revenue Per Advertiser (ARPA). The adjusted EBITDA remained stable at £3.1 million, in line with the previous year. However, the adjusted operating profit witnessed a minor decline of 15%.

The balance sheet reflects strength, boasting a net cash position of £11.5 million, with no outstanding borrowings. This is an improvement from the January 31, 2023, financial status, which showed net cash of £11.3 million.

The company is making substantial progress in developing a distinct, technology-driven property enterprise. The average monthly advertisers have increased by 2%, totalling 13,323. Additionally, the period-end agency branches have grown by 1%, reaching 10,414.

OnTheMarket is directing its efforts towards growing advertiser numbers through various packages and short-term incentives. 

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.”

OnTheMarket share price. 

The OnTheMarket share price surged 53.55% to trade at 108.25p, from Wednesday’s closing price of 70.50p.