REA Group, a property listings company owned by Rupert Murdoch’s News Corp, has recently expressed interest in acquiring U.K. property portal Rightmove. This potential takeover offer is seen as a strategic move to create a global digital real estate business. While discussions with Rightmove have not yet taken place, the announcement has already made an impact on the stock market, with shares of Rightmove surging by 25% in early trading and REA Group’s shares falling by as much as 6%.
The Melbourne-headquartered REA Group has not disclosed the specific details of the potential offer for Rightmove. However, based on market valuation, Rightmove was worth around £4.34 billion ($5.7 billion) as of the market close on Friday. REA Group views the acquisition as a “transformational opportunity” due to the perceived similarities between the two companies in terms of brand awareness, market share, and cultural values.
While REA Group operates multiple property websites in Australia, India, and the U.S., its previous venture in the U.K. faced challenges. The company sold its real estate site PropertyFinder Group to Rightmove rival Zoopla during the Global Financial Crisis in 2009. However, the current U.K. property market conditions appear more favorable, with lower interest rates expected to drive transactions. Rightmove, as the leading property portal in the U.K., is facing increased competition following the acquisition of rival site OnTheMarket by CoStar.
Analysts from Jefferies have noted that REA Group seems undeterred by the intensified market competition. Despite limited cross-border synergies between the two firms, Rightmove could potentially benefit from REA’s expertise in strategic growth areas such as mortgages, commercial, and rental services. The analysts also praised REA Group for its strong operational performance in Australia, where it has gained revenue share from competitors within the last six years.
Under UK takeover laws, REA Group has until the end of September to formally make an offer for Rightmove or withdraw its expression of interest. The potential acquisition could significantly impact the global real estate market by creating a powerful digital platform with a strong presence in multiple countries. It remains to be seen how this move will unfold and whether it will lead to a successful merger between REA Group and Rightmove.
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