OnTheMarket rebel agent makes last-ditch bid to overturn float proposal

An early Gold member of OnTheMarket is making a last-ditch bid to stop its parent company, Agents’ Mutual, from floating on the stock market - despite an overwhelming majority of the body voting in favour of the proposal.

Graeme Lumsden, who has been a vocal critic of the float proposal since it was first made public during the summer, is hoping to overturn the decision at today’s Court Sanction meeting in London - a process which involves a judge deciding that the members’ vote, made last week, was in order and that the float can go ahead.

The float was backed by some 89 per cent of the members who voted - 70 per cent of the total membership - but Lumsden’s detailed submission to today’s Court Sanction meeting makes a series of allegations ranging from non-disclosure of material facts to infair practices and the abandonment of Agents’ Mutual’s original principles.

The first three paragraphs of Lumsden’s five-page submission read:

"As a Gold Member of Agents Mutual Limited I contend that the vote placed before the Court for sanction cannot be a true representation of Members intentions due to a number of issues including non-disclosure of material facts, a lack of proper consultation and an unfair “lock- in” period whereby Members who voted NO (against the Majority Yes Vote) are held into their original Agents Mutual Contract with no prior knowledge or information offered to Members at the inception of their joining that such a fundamental change of ownership/strategy & the abandoning of its “Mutual Foundation” would result in being forced to remain with a New Company with vastly different principles/strategy including the arrival/introduction of shareholders not mutual members. 

"I would respectfully implore the court requests from the Board of Agents Mutual Limited a copy of the Executive Management Contracts entered into by the Board of Agents Mutual Ltd in early 2013, which were apparently updated in September 2016, nearly 12 months prior to the IPO proposal. These contracts, which incentivised the Management Team, were never discussed nor ratified by the mutual members. In addition, although requests for publication have been made, these have been refused by reason that they are deemed to be confidential. We note that some mutual members (not withstanding that they are members of the Board) are aware of the contents yet will not allow the other members the same benefits. Knowledge of the exact contents of said contracts may have affected the voting decisions taken by many of the mutual members. 

"The formation of Agents Mutual Limited was portrayed at the time (of inducing Members to join and commit to contributing financially including “Loan Notes”) as being created under the principle of a mutual membership with one member one vote. There are repeated instances where this “mutual membership” principle does not seem to have played any part in the Boards decisions. I would therefore question their conduct under the duty of care responsibility that all Directors carry. The original basis for the company, and the reason many joined, was that no one member or small group of members would be able to dictate the direction of the company. This is exactly what has happened, seemingly by deliberate intention or otherwise." 

If today’s Court Sanction meeting endorses the process and dismisses Lumsden’s objection, the first stage of the flotation - the in-principle declaration of the Initial Public Offering - is likely to be announced very quickly, possibly tomorrow.

Agents’ Mutual could then move to the IPO quickly: an initial prospectus for investors has to be prepared, but because the float is on the London Stock Exchange’s ‘junior’ Alternative Investment Market, the formal requirements for the prospectus are less onerous than a float on the main market.

An opening share price also has to be agreed, and will be decided after advice from Zeus Capital, the investment consultancy instructed by Agents’ Mutual.

If AM wishes, the float could take place before the end of this year, although it may want to build anticipation - and hope for a general improvement in stock market performance - by waiting until early 2018.

You can see the entirety of Graeme Lumsden’s submission to today’s Court Sanction meeting on his website, here.