A US-based private equity firm Silver Lake Management Company has agreed to buy ZPG for £2.2bn.
Under the terms of the proposed deal, each ZPG shareholder would get 490p – around a 31% premium on the average price for the three months until May 10.
In a joint statement, ZPG said the terms were “fair and reasonable”.
ZPG’s biggest shareholder, the Daily Mail and General Trust, said it undertook to accept Silver Lake’s offer in respect of its own shares, which represent almost 30% of ZPG’s issued share capital, likely to deliver a windfall of £640m. In 2005, the agents who set up PrimeLocation – run by Ian Springett – sold their business to the Daily Mail owners for £48m.
A statement to the stock market this morning said that DMGT had invested in Zoopla since 2012 when DMGT’s property portal business merged with Zoopla.
Paul Zwillenberg, chief executive of DMGT, said: “The recommended all cash offer for ZPG promises to deliver a very significant return for DMGT.”
The deal, which requires 75% support from shareholders, is expected to complete in the third quarter of this year.
City analyst William Packer of Exane BNP Paribas said he expects share prices in both ZPG and Rightmove to perform strongly today.
At the start of trading today, he was proved correct when Rightmove shares immediately shot up 3.5%. The momentum grew in the first hour as the shares soared by 300p (6.6% to 4,909p). ZPG shares also moved up, to 485p, not far below the bid price. OnTheMarket shares went up 9%, to 151p in the first minutes of trading.
Silver Lake said it believes “that ZPG has significant opportunities to increase investment in product and technology, and make further acquisitions in the UK and other countries, in ways that would likely be difficult to implement in the context of delivering consistent financial results to the public markets as a listed company”.