EYE NEWSFLASH: American equity firm’s bid to buy Zoopla is announced

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”.

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14 Comments

  1. ArthurHouse02

    Christ!….Welcome to the sequel to “Portal Wars”

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  2. Pollard36

    Very interesting! Playing Devils Advocate, I wonder if Daily Mail no longer having a vested interest in the property market will change the way the whole group reports on housing in general?

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    1. P-Daddy

      Back to the headlines of statins saving the world, Brussels kidnapping your children and favourite dog, whilst infringing the human rights of terrorists and the coldest/hottest/wet weather in history 🙂

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  3. Property Poke In The Eye

    Interesting week.

    These takeovers and mergers seem to happen when there are tough times ahead.

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  4. MarkJ

    Interesting but concerning……

    The offer price of 490p is equivalent to the highest the ZPG share price has been in the last 4-5 years

    If they get 75% agreement from existing shareholders then….

     

    I’d speculate that the new owners will want to increase revenues after such an outlay.

    Since ZPG now own most of the agency software market as an agent Id be concerned about rising costs.

     

    Spoken as as a ZPG software user/non Zoopla user

     

     

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  5. gardenflat

    The fact Zoopla were offering me silly rates to rejoin recently now makes sense!

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    1. Property Poke In The Eye

      We pay £150 for the sales and lettings Silver package.

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  6. Hillofwad71

    Well if agents are  now happy to fill the coffers of a USA investment fund so be it .Real opportunity to make the tiddler OTM  sing. Forget the green eyed monster of Springett benefitting personally  He has upped the field agents up  to make estate agents  feel loved again  and National TV advertising .Give peace a chance

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  7. Eastsidestory90

    Does anyone know the breakdown of what the portal and non portal side of the business is worth?

    It would be interesting to compare Zoopla and primelocations value compared with other portals.

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    1. P-Daddy

      DMGT own 30% of Zoopla, so the offer at this level gives the who value potential of around £2.2bn as stated in the release. Daily Mail stake of £640m represents nearly 40% of their Groups total revenue, an important amount of money especially after their rather complicated year last year, where it was difficult to get out of them whether they made a profit or not…some lovely creative language and accounting was used for the Stock Market.

      What is interesting is that this news coupled with the news about Emoov and Tepilo is parallel…everyone cashing in after no doubt realising the gravy train is running out of steam. Tepilo is owned by Northern and Shell who own the Daily Express …..

      If you subscribe to Zoopla and all of the software bolt ons…watch out, your costs will rise, hedgefunds and venture capitalists at work.

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  8. Property Pundit

    Take the money and run guys, you won’t ever get a better offer. Change is coming.

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  9. Mark Walker

    Big jumps in Rightmove and On The Market shares on the news and I don’t understand the financial world…

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    1. charlie.wright

      One likely reason is that Zoopla portal advertising costs will get hiked after the buyout strengthening the position of RM and OTM to keep raising theirs too.

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  10. Room101

    Déjà vu – 
    UK regulator scrutinises Virgin Money share price rise
    Shares in lender jumped 15% ahead of takeover approach from CYBG

    vs

    What’s behind the 15% jump in value of ZPG shares?
    Mystery as shares hit 12-month peak and then drop off as ZPG announces increased stream of returning OnTheMarket agents.

    Both headlines you’ll find with a quick search.

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