Purplebricks bidder Lecram pulls out, claiming finances ‘worse than expected’

But less than five days later, Lecram pulled its 0.5p-a-share proposal, leaving Strike – backed by Carphone Warehouse and TalkTalk founder Sir Charles Dunstone – as the only bidder in the running.

Lecram said: “The reason leading to Lecram’s decision not to proceed is, principally, that the financial condition of Purplebricks was found to be significantly worse than expected.”

Purplebricks said it continues to recommend the bid by Strike, with an investor vote scheduled for June 2.

Strike pulled out of bidding for the whole share capital of the firm, but has offered a nominal £1 for its business and assets, including staff.

But it has revealed plans to launch a redundancy programme which is expected to impact field agents and central support teams at Purplebricks.

Purplebricks has seen its share price collapse over the past year, losing nearly 95 per cent of its value.

In the middle of 2022 one share was worth nearly 20p. It is now worth less than 1p.

Lecram, which owns a more than 5 per cent stake in the beleaguered firm, had criticised its leadership before for being “overly optimistic” in its prospects and not acting quickly enough to make improvements and salvage value for shareholders.

Lecram said Strike’s offer is not in the best interests of shareholders and could end up with them receiving “nothing”.

In May, Purplebricks said that its cash reserves were under threat.

In a statement issued last month, it said it was now not set to return to cash generation early in its financial year to April 2024 and that its cash reserves would be at risk if a strategic review and sale were not completed soon.

The firm has experienced a difficult 18 months, with an overhaul of its operating model, multiple management reshuffles and shareholder calls for the removal of its chairman. The group put itself up for sale in February after disclosing its turnaround plans have been costlier than expected and it is set to sink deeper into a loss.

In a statement issued in February, it said: “The board recognise that the potential of the group may be better realised under an alternative ownership structure, and has, therefore, decided to conduct a strategic review of the group’s business with the aim of delivering maximum value for shareholders.”

Founded in 2012, Purplebricks had a lot of success in its early years, disrupting an old industry.

In 2017 the company’s shares were selling for about £5 each, but their value has now fallen significantly.