Europe

Rupert Murdoch’s property group considers bid for UK’s Rightmove, sending shares 21% higher

Rupert Murdoch, chairman emeritus of media empire News Corp.

Axelle/bauer-griffin | Filmmagic | Getty Images

LONDON — Rupert Murdoch-owned REA Group said Monday it is contemplating a takeover offer for U.K. property portal Rightmove in a bid to create a global digital real estate business.

The Australian property listings company, which is controlled by Murdoch’s News Corp, said in a statement to the Australian stock market that it was considering a possible cash and share offer for Rightmove, but it has not yet had any discussions with the company.

Shares of Rightmove jumped 25% in early deals following the announcement. The stock was 27.4% higher by the close of Monday’s session and ended at the top of the FTSE 100. Shares of REA Group fell as much as 6%.

Rightmove has not released a statement nor did it immediately respond to CNBC’s request for comment.

REA Group’s announcement comes after reports emerged that it was working with Deutsche Bank on a large overseas acquisition, according to the Financial Times.

Rightmove is the U.K.’s leading property portal, used by estate agents to advertise properties for sale and rent. Melbourne-headquartered REA Group did not say how much it was considering offering for Rightmove, but the U.K. platform was valued at £4.34 billion ($5.7 billion) as of market close Friday.

In its statement, REA Group said it saw the potential acquisition as a “transformational opportunity” and cited “clear similarities” between the two firms, including strong brand awareness, market share and “highly aligned cultural values.”

REA Group, in which News Corp owns a more than 61% interest, operates a number of property websites in Australia, as well as several brands in India and the U.S.

However, REA Group’s previous venture into the U.K. faced stiff market pressure. The company sold its real estate site PropertyFinder Group to Rightmove rival Zoopla in 2009, during the Global Financial Crisis.

The U.K. property market now appears more favorable, with lower interest rates expected to boost transactions. But Rightmove is set to confront headwinds following the acquisition of rival site OnTheMarket by U.S. property firm CoStar.

Jefferies analysts said in a note Monday that REA Group appeared undeterred by the increased market competition., having previously faced rivalry from CoStar in the U.S., via its investment in realtor.com.

Despite limited “cross-border synergies” between the two firms, the Jefferies analysts also noted that Rightmove could benefit from REA’s strong management and expertise within Rightmove’s “strategic growth areas,” namely mortgages, commercial and rental services.

“It is worth crediting REA with being a strong operator in Australia, having taken revenue share from the #2 player DHG in the last six years,” the analysts said, referencing rival Australian property portal Domain Group.

Under UK takeover laws, REA now has until the end of September to formally make an offer or walk away following its public expression of interest.

Checkout latest world news below links :
World News || Latest News || U.S. News

Source link

Back to top button