Rupert Murdoch, chairman emeritus of media empire News Corp.
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LONDON — Owned by Rupert Murdoch REA Group said on Monday it was considering a takeover bid for the UK property portal Right movement in an effort to create a global digital real estate business.
The Australian property listings company, which is controlled by Murdoch’s News Corp, said in a statement to the Australian stock exchange that it was considering a possible cash and share offer for Rightmove, but has yet to hold talks with the company.
Shares in Rightmove jumped 25% in the first deals following the announcement. The stock rose 27.4% at the close on Monday to top the FTSE 100. Shares in REA Group fell as much as 6%.
Rightmove did not release a statement or immediately respond to CNBC’s request for comment.
REA Group’s announcement comes after reports that it is working with Deutsche Bank on a major overseas acquisition, according to in the Financial Times.
Rightmove is the UK’s leading property portal, used by estate agents to advertise properties for sale and rent. Melbourne-based REA Group did not say how much it intended to offer for Rightmove, but the UK platform was valued at 4.34 billion pounds ($5.7 billion) as of Friday’s market close.
In its statement, REA Group said it viewed the potential acquisition as a “transformational opportunity” and cited “clear similarities” between the two companies, such as strong brand recognition, market share and “highly aligned cultural values.”
The REA Group, in which News Corp owns more than 61%, operates a number of property websites in Australia, as well as several brands in India and the US
However, REA Group’s previous venture in the UK faced stiff market pressure. The company was sold Property website PropertyFinder Group to rival Rightmove Zoopla in 2009, during the Global Financial Crisis.
The UK property market is now looking more favorable, with lower interest rates expected to boost trading. But Rightmove is set to face headwinds following its takeover rival website OnTheMarket from an American real estate company CoStar.
Jefferies analysts said in a note on Monday that REA Group appeared undeterred by increased market competition, having previously faced competition from CoStar in the US through its investment in realtor.com.
Despite limited “cross-border synergies” between the two companies, Jefferies analysts also noted that Rightmove could benefit from REA’s strong management and expertise in Rightmove’s “strategic growth areas”, namely mortgages, commercial and services rental.
“REA is to be credited as a strong operator in Australia, having taken revenue share from #2 player DHG for the past six years,” the analysts said, referring to rival Australian property portal. Domain Group.
Under UK takeover laws, REA now has until the end of September to formally submit a bid or exit after the public expression of interest.
