Purplebricks gains on takeover talk

Purplebricks shares rose on speculation that a US private equity firm was considering buying the online estate agent's UK business.

Francisco Partners was rumoured to be weighing up an offer for the UK division of the troubled company. The San Francisco-based firm, which has a London office, specialises in buying technology-enabled businesses, The Negotiator reported.

Purplebricks shares were up 7.8% to 96.84p at 1021 BST. The shares reached a record low on Tuesday before picking up at the end of trading as talk of a bid spread.

The company charges an upfront fee for listing a property online depending on how much work the seller wants to do themselves. The arrangement can save sellers money but the fee is paid whether the property sells or not.

Purplebricks promised to shake up the market for property sales and attracted investment from Neil Woodford's fund but it has struggled after expanding too quickly in the US and Australia.

On 7 May founder Michael Bruce quit as chief executive as and the company's chairman apologised for its mistakes. Its shares are worth less than a quarter of their value a year ago.

The company shut its Australian division when Bruce quit, leaving the UK business and operations in Canada and Europe. Francisco Partners is said to be interested in the British business only.

A sale would allow Woodford, whose fund owns almost 30% of Purplebricks, an exit route though at a loss. Germany's Axel Springer, which invested £100m in Purplebricks in 2018 at 360p a share, could be less willing to sell.