Smoove LON:SMV, the AIM-listed, software company providing data platforms to conveyancers, mortgage brokers and home-movers, has announced that it is extending the deadline for Pexa Group [ASX:PXA], the Australian digital property settlements platform, to make a firm offer to buy out the Oxfordshire-based, real estate IT company or withdraw from negotiations to 16th June.
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As previously reported, speculation had been doing the rounds that Smoove was a takeover target, and on 24th April Smoove confirmed speculation that it was indeed in talks with the Australian settlements company.
As reported, Smoove had a bruising 2022, given the turmoil in the UK real estate sector following the disastrous Liz Truss budget, and the Bank of England’s campaign against inflation leading to interest rates being raised a dozen times consecutively, which had the effect of chasing first time mortgage applicants and me re-mortgagers out of the market, pushing down house prices in the UK and slowing the overall property market. Smoove’s closeness to the UK property market left it vulnerable to negative sentiment.
Weak performance
Weak performance from Smoove alerted potential buyers wanting to step into the UK’s (usually) notoriously robust property market and Pexa and at least one other potential bidder stepped into the fray.
The original deadline for Pexa to make a firm intention to make an offer to buy Smoove or walk away was 22nd May. However, management of Smoove said that negotiations were still ongoing between the company and Pexa and applied for an extension of the deadline under Rule 2.6(c) of the City Code on Takeovers and Mergers.
The takeover would be an all-cash offer according to Smoove.
The company opened trading at 49.25p this morning (24th May), but was up to 50.3p within half-an-hour of the market opening. Smoove has offered a 43.3% year-to-date return and a -22.6% one-year return, with its shares ranging between 27p and 77p over a 52-week period.
The company has an GBP28.2m market capitalisation.
Pexa was established in Australia in 2010 as the world’s first digital settlement platform born out of a 2008 Council of Australian Governments’ initiative to transition property lodgement and settlement away from an outdated paper-based process to a more efficient digital settlement process. Today more than 80% of all property transactions in Australia are completed via PEXA.
The Pexa brand operates in the UK as the trading name of Digital Completion UK Limited, established as a holding company in August 2020 and based at Portland Street, London. The company says it is working with the Bank of England “to streamline the re-mortgaging and property completion experience from start to finish,” to “advance how Britons buy and sell homes.”
Currently Pexa UK is involved in the remortgaging side of the business offering technology solutions and platforms to UK lenders, lawyers, and conveyancers in England and Wales, but is due to expand into sale and purchase in 2024.
Smoove listed on AIM in July 2014 and provides a software platform for home moving. The platform helps home movers to find and compare solicitors, estate agents, and other services related to moving home. Smoove also offers a range of tools and resources to help home movers with the administrative aspects of moving, such as packing lists and checklists.
