Rightmove is reportedly speaking to US banks UBS and Morgan Stanley on its response to the unsolicited takeover bid from Rupert Murdoch’s REA Group, according to Bloomberg.
REA announced its intention to explore a possible cash and share offer for the UK’s biggest property portal in a statement yesterday to the Australian Stock Exchange.
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 has until the end of September to make a formal offer, with equity raising likely needed to fund the ambitious acquisition.
Rightmove said it has not yet received a formal approach from REA and told shareholders to take no action.
Shares in the firm jumped by 27 per cent on Monday, its biggest daily gain on record. Its market value climbed to £2.6bn.
Shares in REA dropped more than five per cent in Sydney.
“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,” REA said on Monday.
“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.”
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.”