Rightmove has just issued a statement after REA Group, the property listings company majority-owned by News Corp, said this morning that it was considering buying the major property portal to create a global real estate giant.
Rightmove had a market value of £4.36bn ($5.73bn) as of Friday’s close.
If the deal goes through, it will be the largest so far this year where an Australian firm buys an overseas company, data from LSEG showed.
REA said it was considering a possible cash and share offer for London-listed Rightmove. It, however, said it had neither approached nor held any talks with Rightmove.
REA now has to update the market if it has a firm intention to make a bid by 30 September under the UK’s takeover code.
REA has just issued the following statement:
“Further to press speculation in relation to a possible offer by REA for London Stock Exchange listed Rightmove plc (“Rightmove”), REA confirms that it is considering a possible cash and share offer for the entire issued and to be issued share capital of Rightmove. REA has not approached, nor had any discussions with, Rightmove regarding any potential offer, and makes this announcement in accordance with the requirements of the Code.
“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.
“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 UK.
“The REA Board believes the enlarged group would represent a highly attractive investment opportunity for both REA and Rightmove shareholders, combining robust growth with strong margins and significant cash generation, enabling continued capital appreciation and shareholder returns. REA therefore considers that a combination of the two businesses would provide a significant opportunity to unlock shareholder value.
REA has a long history of growth and has demonstrated a track record of building businesses over decades to create globally leading platforms that have transformed the way people experience property. With an acquisition of Rightmove, REA would look to enhance the UK property experience for buyers, sellers and renters, supporting Rightmove’s vision “to give everyone the belief they can make their move” while positively contributing to the property market ecosystem with investment and innovation.
“There can be no certainty that an offer will be made, nor as to the terms on which any offer may be made. REA shareholders do not need to take any action at this time.
“Rule 2.6(a) of the Code requires that REA must, by no later than 5.00 p.m. (London time) on 30 September 2024, being the 28th day following the date of this announcement, either announce a firm intention to make an offer for Rightmove in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer for Rightmove, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline will only be extended with the consent of the Takeover Panel, in accordance with Rule 2.6(c) of the Code.
“In accordance with Rule 2.5(a) of the Code, REA reserves the right to introduce other forms of consideration and / or vary the mix or composition of consideration of any offer.
“In the interests of secrecy prior to this announcement, REA has not made any enquiries of certain parties who may be deemed by the Takeover Panel to be acting in concert with REA in order to determine whether REA would be obliged to offer any minimum level, or particular form, of consideration under Rule 6 or Rule 11 of the Code. Enquiries of such parties will be made as soon as practicable following the date of this announcement and any disclosure in respect of such parties will be made in a further announcement.
“A further announcement will be made in due course.
“The release of this announcement was authorised by the Disclosure Committee.”
Now this is interesting as I know that over the years there’s been a lot of interested in what Realestate.com.au have been doing in Australia.
Possibly one of the only businesses that RM could learn from, from a revenue earning angle particularly.
The biggest concern as far as I can see from a UK agents perspective is that rather than just office based charging they also allow per listing fees which goes up dependent on the location in the market and that might be up to from memory as much as 5-6 thousand Aussie dollars.
That might be sustainable at those levels with Australia’s amazing ability to get consistent vendor paid advertising but surely not here. But that change could have massive connotations.
A Co Star – REA ding dong suddenly raises the stakes massively , could agents benefit from all the increased marketing to win hearts and minds of the public
Grabs popcorn
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…and in fairness to ZPG they’re back to their old ways, sticking to their knitting rather than faffing about with CRM -a game they’ve lost to Heather & Tom, Mark, Oliver & Mark, or James
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See that £4billion..
Yeah.
Estate agents give that 4 billion away every year they do.
What?
Yeah, agents are quite stupid and work alone.
Wow
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not quite. £4bn is the enterprise value not the revenue. annual income is around £360m, and yes this all comes from agents and developers.
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REA’s largest portal charges per property £500-£2500, the owner usually pays this separately.
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Very interesting – could move the game on. As Simon mentions above, a Co-Star/REA “ding dong” could be of benefit to agents, but maybe only in short term? I can’t help feeling that, as existing, RM is facilitating a bit of inertia – meaning the experience for agents AND, importantly, buyers/tenants using the portal, has not moved on much over the last few years. There’s so much potentially on offer to elevate the experience for those using the site, an REA purchase might just do that? Can’t help feeling they’re buying at peak tho’!!
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Sorry , the price hopped up 19% this morning so £4.4B is a bit short of what the vendor is hoping for.
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The days of property portals may be numbered as social media increasingly becomes the go-to platform for finding and advertising properties. It might be in Rightmove’s best interest to consider selling while they still have value.
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