MARKET REPORT: German newspaper tycoon builds a 12.5% stake in Purplebricks

Money

Online estate agent Purplebricks became a little more continental yesterday as media group Axel Springer, owner of newspaper Die Welt and publisher of Rolling Stone magazine in Germany, bought another £9.2million of shares.

Axel Springer first invested in Purplebricks in March, splashing out £150million for an 11.5 per cent stake.

Most of this was used to buy shares, giving Purplebricks around £100million to help it expand in the US and other new countries.

Shares in the no-commission estate agent were on the rise following Axel’s investment, ending the day up 0.6 per cent, or 2p, at 325.2p.

German newspaper tycoon Axel Springer - owner of newspaper Die Welt and publisher of Rolling Stone magazine in Germany - has bought £9.2m worth of shares in Purplebricks

German newspaper tycoon Axel Springer - owner of newspaper Die Welt and publisher of Rolling Stone magazine in Germany - has bought £9.2m worth of shares in Purplebricks

German newspaper tycoon Axel Springer – owner of newspaper Die Welt and publisher of Rolling Stone magazine in Germany – has bought £9.2m worth of shares in Purplebricks

Andreas Wiele, president at Axel and non-executive director of Purplebricks, said in March: ‘For Axel Springer, this minority stake offers the opportunity to participate in an innovative, fast growing business model in new markets.’

It seems the firm is not content with the Seloger, Immowelt and Immoweb property portals it already operates, which list houses and apartments across France, Belgium and Germany. 

A spokesman for Axel added that the latest deal was ‘simply a good opportunity’ to increase its stake in Purplebricks, and did not rule out the idea that it may build an even larger stake. 

Stock Watch – Metal Tiger

Metal Tiger purred into action yesterday as it announced a ‘significant’ copper find in Botswana.

The miner’s chief executive Michael McNeilly said geologists were ‘particularly excited’ by the particular copper mineralisation it had found in its latest drill, as the style had been previously unseen at the Metal Tiger and MOD Resources joint venture in the Kalahari Copper Belt.

Metal Tiger’s share price crept up yesterday by 5.3 per cent, or 0.15p, to 3p.

It is already the second largest shareholder, owning 12.5 per cent, behind Woodford Investment Management with 29 per cent.

Founding brothers Michael and Kenny Bruce, along with Purplebricks’ non-executive director William Whitehorn, pocketed £25million between them in March from selling shares to Axel.

But the business itself has divided analysts, especially as it released results last week which showed losses had quadrupled for the year to £21.3million. 

Anthony Codling at Jefferies has questioned how many of the properties listed on the website actually sell, saying Purplebricks has been deliberately loose with its data and advising investors to steer clear of its ‘unproven’ model. 

Broker Peel Hunt, on the other hand, has given Purplebricks a ‘buy’ rating, saying its increased investment would drive further growth.

After a dramatic day for the Brexit talks, which saw the resignation of Brexit Secretary David Davis and Foreign Secretary Boris Johnson, investors seemed to be pricing in the chance that Brexit might not actually happen.

The pound bounced around against the dollar all day between $1.32 and $1.33. Jordan Hiscott of Ayondo Markets, said: ‘I had expected there to be a notably weaker pound today. As I analyse the results, it’s becoming clearer that the market is pricing in either a soft Brexit or no Brexit at all.’

The FTSE also rose, ending the day up 0.92 per cent, or 70.29 points, at 7687.99, as investors digested the Government changes and had the weekend to weigh up the first moves made in the US-China trade spat.

Mining heavyweight BHP Billiton climbed 2.6 per cent, or 44p, to 1708.2p amid reports that oil giant BP would acquire its onshore shale oil and gas assets for more than £7.5billion. BP itself ended the day up 1 per cent, or 5.5p, at 584.6p.

In other mining news Cairn Energy rose 2.4 per cent, or 5.6p, to 238p, as it went some way towards digging itself out of a dispute with the Indian government.

A date in August has been set for the final arbitration hearings, in a case where Cairn is seeking almost £1billion in damages. 

It alleges that the Indian Income Tax Department has seized a number of its assets to enforce a tax claim, in breach of the investment treaty between the UK and India.

Elsewhere on London’s junior market, investment manager Miton Group shot up 12.4 per cent, or 7p, to 63.5p after announcing that investors had piled £616million more into its funds in the first half of the year.

 

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