Purplebricks snapped up by rival Strike for £1

Troubled online estate agent Purplebricks has agreed a deal to sell its business and assets to rival Strike, for the token sum of £1.

Purplebricks' aim was to create a lower-cost, more flexible estate agent by charging house sellers a flat rate.

But the UK firm, which was once valued at more than $1bn (£800m), put itself up for sale in February.

It said the deal will lead to job losses, and that its boss will step down after the sale.

The announcement sent its shares tumbling by around 40%.

Over the past 18 months there have been a number of management reshuffles at the company, a restructure, and one of its shareholders called for the removal of its chairman, Paul Pindar.

The company revealed in February that it expected to lose between £15-£20m this year.

It said last week that it was in exclusive talks with Strike.

The sale price of £1 is down to the company burning through cash, the BBC understands.

The firm is spending £3m per month on costs including staff, hosting and marketing.

Purplebricks has been making staff redundant over the past 12 months, and sales have taken a hit.

But out of more than 750 employees, the BBC understands the firm will try to keep many on.

Its chief executive Helena Marston is set to resign after the sale completes, and a number of directors will also step down.

Mr Pindar said: "I am disappointed with the financial value outcome, both as a 5% shareholder myself and for shareholders who have supported the company under my and the board's stewardship.

"However, there was no other proposal or offer which provided a better return for shareholders, with the same certainty of funding and speed of delivery necessary to provide the stability the company needs."

The firm said the deal would transfer its £33m liabilities to its new owner.

Purplebricks was founded in 2012 by brothers Michael and Kenny Bruce, who grew up on a council estate in Larne, County Antrim.

The company had early success, but it has seen its share price fall 98% over the past five years.

In 2017 its shares suffered after a BBC Watchdog investigation into allegations that it had made misleading claims to customers.

A year later, stockbrokers Jefferies said selling with Purplebricks was a "£1,000 coin toss".

Unlike traditional estate agents, its customers had to pay the fee regardless of whether the property sold, Jefferies said.

Strike is backed by the Carphone Warehouse and TalkTalk founder Sir Charles Dunstone - who is a partner at Strike's joint major shareholder Freston Ventures.

Sir Charles said the deal was "a positive outcome for anyone looking to sell their home".