Rupert Murdoch’s REA Group has announced it is considering a possible takeover bid for online property portal Rightmove.
The global online real estate advertising company said it was weighing up a cash and share offer for Rightmove as it believes there are “clear similarities between REA and Rightmove in terms of their leading market positions in the core residential business, continued expansion and innovation of offerings across adjacent segments, leading audience share and strong brand awareness, as well as highly aligned cultural values”.
REA said the takeover presented a “transformational opportunity to apply its globally leading capabilities and expertise to enhance customer and consumer value across the combined portfolio and to create a global and diversified digital property company, with number one positions in Australia and the UK”.
The board of REA added the enlarged group would “represent a highly attractive investment opportunity for both REA and Rightmove shareholders, combining robust growth with strong margins and significant cash generation, enabling continued capital appreciation and shareholder returns”.
REA must make an offer for Rightmove or announce that it does not intend to make an offer for Rightmove by 30 September 2024. Rightmove’s share price rose by more than 20% this morning following the announcement by REA Group.
Jessica Pok, analyst at Peel Hunt, said: “It does not come as a surprise to us today that Rightmove has become an acquisition target, given the rating has been subdued for some time due to the negative sentiment on the UK housing market and concerns over competitive threats from CoStar/OnTheMarket.
“However, our belief, reflected by the takeover interest, is that the shares look attractive, given the stability of its core classifieds business and the growth opportunities in other revenue streams such as mortgages, commercial RE and rental under the new CEO. On top of that, with declining rates, we believe the UK property market has scope for improvement as we move into 2025.”
