Business

REA Group plans potential acquisition of Rightmove – Share price rises by 25 percent

The Australian real estate platform REA Group, which is controlled by Rupert Murdoch's News Corp, is considering the acquisition of the British real estate platform Rightmove.

Eulerpool News Sep 2, 2024, 6:27 PM

Here is the heading translated to English:

"Shares of the British real estate platform Rightmove jumped 25 percent on Monday after it was revealed that the Australian REA Group, controlled by Rupert Murdoch's News Corp, is considering a takeover of the British company. REA Group described the potential acquisition as a 'transformative opportunity' but still sees 'clear similarities' between the two companies.

Although REA has not yet made an official offer, the company announced that it is considering the possibility. Reports that REA is working with Deutsche Bank on a major acquisition abroad have further fueled speculation. Under British takeover law, REA has until the end of September to make a formal offer or withdraw.

Rightmove, which holds more than 80 percent of the market share in the UK, faces a competitive market environment with rivals such as Zoopla and OnTheMarket. The latter recently announced an expansion following its acquisition by the US real estate group CoStar. In March, Rightmove warned that the number of customers could slightly decrease in 2024 as real estate agents and construction companies come under pressure due to the market downturn.

Nevertheless, Rightmove was able to report a revenue growth of 7 percent in the first half of 2024 in July, as customers increasingly invested in their advertisements. Johan Svanstrom, who took over as CEO last year, is focusing on growth areas such as rental properties, mortgage services, and commercial real estate, and is investing in the digitalization of property purchasing.

While Rightmove shares gained in value, the REA Group's share price fell by 7 percent, as a potential takeover might necessitate a capital increase. The REA Group, whose share value has increased by 25 percent in the last twelve months, has benefited greatly from the booming Australian real estate market.

REA was founded in the mid-1990s in a garage in the suburb of Doncaster, Melbourne, and briefly became a stock market darling after its IPO on the Australian Securities Exchange in 1999 during the Dotcom Bubble. After a stock decline, News Corp acquired a 44% stake in the company for around 2 million Australian dollars in 2001, an investment that proved to be extremely profitable. Today, the company is worth 26 billion Australian dollars (17.6 billion US dollars).

This potential acquisition could provide the REA Group with the opportunity to further expand its international presence, especially after the company has exited some international markets, including Europe and Southeast Asia. The involvement in Rightmove could be the next step to secure long-term economic returns and further strengthen market position.

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