Australian property giant REA Group, backed by Rupert Murdoch’s News Corp, is considering a £4.4bn takeover bid for UK competitor Rightmove.
In a statement to the Asutralian stock exchange, property search firm REA said it was considering a possible cash and share offer for the entire issued share capital of Rightmove but it was yet to enter any talks with the company.
A tie-up between the two could significantly reshape the online property market across two continents, and create a global leader in real estate. If completed, it would mark the largest outbound transactions from Australia this year.
It now has until the end of September to make a formal offer, with equity raising likely needed to fund the ambitious acquisition.
“The REA Board believes that 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,” the company said.
“REA sees 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 1 positions in Australia and the UK.”
Rightmove is yet to respond.
REA, one of Australia’s largest listed companies, has seen a 25 per cent rise in stock value this year.
In August it raised its dividend after reporting a jump in annual earnings. It said this had been driven by continuing high demand in the Australian residential market, and that with unprecedentedly-high interest rates being put on hold, positive market fundamentals and robust supply should support consumer confidence.
As of Friday’s market close, Rightmove, the UK’s largest property portal, was valued at £4.36bn ($5.73bn).
The company generates revenue by charging real estate agents to list properties on its platform.
Jessica Pok, an 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. “