News Corp-controlled online real estate group REA’s shares have slumped after the group was forced to reveal it was considering a cash and share offer to buy UK counterpart Rightmove.
The realestate.com.au website’s operator, in which News Corp owns a 61.4 per cent stake, paused its shares on the ASX 200 minutes before trading opened on Monday after a report in The Australian Financial Review on Sunday pointed to possible takeover activity by REA.
REA Group chief executive Owen Wilson, who the AFR on Monday revealed had been working with Deutsche Bank on a potential takeover of Rightmove. Credit: REA Group
In a statement to the ASX on Monday, REA’s board announced the possible takeover bid but said it still had “not approached, nor had any discussions with Rightmove, regarding any potential offer”.
Shares in REA dropped more than 7 per cent once trading resumed and were trading at $202.98 in the afternoon session. On London’s FTSE overnight, Rightmove shares jumped 27 per cent on the news.
REA said it believed there were “clear similarities” between the $26.9 billion REA and the FTSE 100-listed Rightmove, which is worth £4.4 billion ($8.5 billion), including leading market positions in the residential property business, continued expansion, and “highly aligned cultural values”.
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REA said the potential buyout offered an opportunity to create a “global and diversified digital property company, with number one positions in the UK and Australia”, adding it believed the combined group would make an attractive investment opportunity for REA and Rightmove investors alike.
It said there was “no certainty an offer would be made, nor as to the terms on which any offer would be made”, and advised shareholders they did not need to take any action.
Earlier, the Financial Review’s Street Talk column reported that REA Group chief executive Owen Wilson had been working with Deutsche Bank as advisers on a potential takeover. REA executive manager for investor relations Angus Urquhart told the publication on Sunday he could “categorically confirm” the group was not yet in discussions with Rightmove.
Source Agencies
