Rupert Murdoch, chairman emeritus of media empire News Corp.
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London – Owned by Rupert Murdoch Ria Group It said on Monday it was considering making a takeover bid for the British property portal. Right Move In an attempt to create a global digital real estate business.
The Australian property listings company, controlled by Murdoch's News Corp, said in a statement to the Australian Securities Exchange that it was considering a potential cash and share offer for Rightmove, but had not held any discussions with the company yet.
Shares in Rightmove surged 25% in early trading after the announcement. The stock was up 27.4% at the close on Monday and finished at the top of the FTSE 100. Shares in REA Group were down 6%.
Rightmove has not issued a statement and did not immediately respond to CNBC's request for comment.
REA Group's announcement comes after reports emerged that it is working with Deutsche Bank on a major overseas acquisition, according to the Financial Times.
Rightmove is the UK’s leading property portal, used by estate agents to advertise properties for sale and rent. Melbourne-based REA Group did not say how much it was considering offering to buy Rightmove, but the UK platform was valued at £4.34 billion ($5.7 billion) at market close on Friday.
In its statement, REA Group said it saw the potential acquisition as a “transformative opportunity” and cited “clear similarities” between the two companies, including strong brand awareness, market share and “highly compatible cultural values.”
REA Group, in which News Corp owns a more than 61% stake, operates a number of real estate websites in Australia, as well as several brands in India and the United States.
However, REA’s previous venture into the UK faced severe market pressure. The company sold its property website PropertyFinder Group to Rightmove rival Zoopla in 2009, during the global financial crisis.
The UK property market is looking more favourable now, with low interest rates expected to boost transactions. But Rightmove is set to face headwinds after the US real estate firm acquired rival site OnTheMarket. costar.
REA Group appeared unfazed by the increased competition in the market, having previously faced competition from CoStar in the U.S., via its investment in realtor.com, analysts at Jefferies said in a note on Monday.
Despite limited “cross-border synergies” between the two companies, Jefferies analysts also noted that Rightmove could benefit from REA’s strong management and expertise in Rightmove’s “strategic growth areas,” namely mortgage, commercial and leasing services.
“REA is worthy of being credited as a strong operator in Australia, having taken revenue share from No. 2 player DHG for the past six years,” analysts said, referring to rival Australian property portal DHG. Domain group.
Under UK takeover rules, REA now has until the end of September to make a formal offer or withdraw after publicly expressing interest.
