Australian property company REA, majority-owned by Rupert Murdoch’s News Corp, has initiated talks with UK’s largest online real estate portal, Rightmove. The proposed offer is reportedly in the low-700p range per share, valuing Rightmove at over £5.5bn. Although the offer is not formal yet, REA has until the end of September under UK takeover rules to make a decision. Rightmove’s board is likely to reject the initial proposal.
Analysts view REA’s move as opportunistic, believing that Rightmove is undervalued, especially with rising profits expected in the UK’s rebounding property market. Peel Hunt analysts consider Rightmove to be the “cheapest publicly listed classifieds businesses in Europe.” News of the potential bid has sparked interest in the market, with Rightmove’s shares closing higher after the news surfaced.
News Corp’s digital real estate services, including REA, generated a significant portion of global profits in the past year. The company’s worth has significantly increased since News Corp’s initial acquisition of a stake in 2001. The potential acquisition of Rightmove follows similar moves in the industry, such as US giant CoStar acquiring OnTheMarket for £100m in October.
In 2018, US private equity group Silver Lake acquired Zoopla, the UK’s second-largest property portal. Bloomberg first reported the initial talks between REA and Rightmove, but both companies have declined to comment on the matter. The market eagerly awaits a formal offer from REA as the situation continues to unfold.
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