Shares in online property portal Rightmove surged nearly a quarter in early trading today following news that Australian property giant REA Group, backed by Rupert Murdoch's News Corp, is contemplating a £4.4bn takeover bid for the FTSE 100 firm.
In a statement to the Australian stock exchange, property search company REA revealed it was considering a potential cash and share offer for the entire issued share capital of Rightmove, although no discussions with the company have yet taken place.
A merger between the two could dramatically reshape the online property market across two continents, establishing a global leader in real estate. If successful, it would represent the largest outbound transactions from Australia this year.
- Read more: Scandal-hit Home REIT sells over 100 properties
- Read more: Platform Housing Group reports strong start to the year
The company now has until the end of September to submit a formal offer, with equity raising likely required to finance 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 stated, as reported by .
"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 海角视频."
Rightmove has yet to comment on the matter.
Shares in REA, one of Australia's largest companies, have seen a 25 per cent increase this year.
Most Read
In August, the company increased its dividend following a surge in annual earnings. This was attributed to the ongoing high demand in the Australian residential market.
With record-high interest rates being put on hold, positive market fundamentals and robust supply are expected to bolster consumer confidence.
As of the close of the market on Friday, Rightmove, the 海角视频's leading property portal, had a valuation of £4.36bn ($5.73bn).
The company generates income by charging estate agents to list properties on its platform.
Jessica Pok, an analyst at Peel Hunt, commented: "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 海角视频 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 海角视频 property market has scope for improvement as we move into 2025. ".
Don’t miss
Russ Mould, investment analyst at AJ Bell, commented: "REA moving on Rightmove would amount to a highly opportunistic bid. The target's share price has been weighed down by investor worries about a lacklustre property market and a new competitive threat after US property giant CoStar struck a deal to expand into the 海角视频."
"It is easy to see why REA would be interested in Rightmove. The 海角视频 property market is traditionally vibrant under normal economic circumstances. Once you consider the new Labour government has pro-housing policies and a strategy firmly focused on improving the 海角视频 economy, there is the potential for Rightmove's earnings to be much stronger in time."
"REA could take a long-term view and buy the business now while sentiment is patchy and pay much less than if it had bought at the peak of the property market."