Rupert Murdoch, chairman emeritus of the media empire News Corporation.
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London — owned by Rupert Murdoch REA Group The company said on Monday it was considering a takeover bid for the British property portal. Right move Our goal is to create a global digital real estate business.
The Australian property information company, owned by Murdoch’s News Corp, said in a statement to the Australian stock market that it was considering a cash-and-share takeover bid for Rightmove but had not yet entered into discussions with the company.
Rightmove shares rose 25% in the early trading hours following the announcement. By 12:32pm, shares were up 20.9% and trading at the highest level on the FTSE 100 index. REA Group shares fell 6%.
RightMove has not released a statement and did not immediately respond to CNBC’s request for comment.
REA Group’s announcement comes after reports emerged that the company was working with Deutsche Bank on a major overseas acquisition, according to the Financial Times.
Rightmove is Britain’s leading property portal, used by agents to advertise properties for sale or to rent. Melbourne-based REA Group did not disclose how much it offered for Rightmove, but the U.K. platform was valued at 4.34 billion pounds ($5.7 billion) as of Friday’s market close.
In a statement, REA Group saw the potential acquisition as a “transformative opportunity” and noted “clear similarities” between the two companies, including strong brand recognition, market share and “highly aligned cultural values.”
REA Group, in which News Corp owns more than 61% of the stock, runs a number of property websites in Australia as well as several brands in India and the United States.
But REA Group’s previous UK expansion faced severe market pressure after it sold property site PropertyFinder Group to Rightmove rival Zoopla at the height of the 2009 global financial crisis.
The UK property market currently appears in a more favourable position with falling interest rates expected to lead to an increase in transactions, but Rightmove could face headwinds after rival site On The Market was bought by a US property company. Coster.
REA Group, which has previously faced competition from CoStar in the U.S. through its investment in realtor.com, appears undeterred by increased market competition, Jefferies analysts said in a note on Monday.
Jefferies analysts also noted that while there were limited “cross-border synergies” between the two companies, Rightmove would be able to benefit from REA’s strong management and expertise in Rightmove’s “strategic growth areas” such as mortgages and commercial and rental services.
“REA is a strong operator in Australia and is worth valuing having taken revenue share from number two DHG over the past six years,” the analysts said, referring to rival Australian property portal. Domain Groups.
Under UK takeover law, REA has until the end of September to decide whether to make a formal offer or withdraw following public expressions of interest.
