UK-based housing portal Rightmove surges as News Corp-owned REA considers offer
3:42 am Monday, September 02nd, 2024
By Rishav Chatterjee and Aaditya GovindRao
(Reuters) -REA Group, the property listings company majority-owned by News Corp, is considering buying Rightmove to create a global real estate company, the Australian firm said on Monday, sending the British housing portal’s shares soaring.
Shares in Rightmove jumped 24% to 6.89 pounds, their highest level since March 2022, in early deals on the London Stock Exchange, and the stock was the top percentage gainer on the FTSE 100 index. The company declined to comment.
Britain’s largest property portal, Rightmove had a market value of 4.36 billion pounds ($5.73 billion) as of Friday’s close. It makes money from listing real estate agents on its website.
Analysts at Investec in a note agreed with REA’s stand that the offer and the enlarged group presents a highly attractive investment opportunity given an easing interest rate environment in the U.K. and recent new investment starting to pay off.
Shares of REA, in which the Murdoch family-controlled media firm News Corp owns a more than 61% interest, fell as much as 8% to A$201.5 ($136.48) and were set for their worst day since December 2022. The stock closed 5.3% lower at A$207.4, one of the day’s biggest losers on the benchmark.
If the deal goes through, it will be the largest so far this year in which an Australian firm buys an overseas company, data from LSEG showed.
REA said it was considering a possible cash and share offer for London-listed Rightmove. It, however, said it had neither approached nor held talks with Rightmove.
REA now has to update the market if it has a firm intention to make a bid by Sept. 30 under the U.K.’s takeover code.
“Despite the potential long-term benefits of a strategic acquisition, the takeover move suggests capital vulnerability and risks,” Junvum Kim, Saxo Asia Pacific senior sales trader at Saxo Markets, said in regard to the potential deal for REA.
A deal would boost growth for REA, the largest player in Australia’s online property space which has already developed a foothold in Asian countries including India.
Rightmove, on the other hand, has continuously reported a pickup in revenue in the recent past amid expectation of an improvement in the U.K. housing market on falling interest rates.
($1 = 0.7613 pounds)
($1 = 1.4765 Australian dollars)
(Reporting by Aaditya Govind Rao and Rishav Chatterjee in Bengaluru; Additional reporting by Aby Jose Koilparambil; Editing by Subhranshu Sahu and Christopher Cushing)
