REA Considers $5.8 Billion Bid for UK Property Portal Rightmove

02 Sep, 2024

REA Considers $5.8 Billion Bid for UK Property Portal Rightmove

REA Group Ltd., part of Rupert Murdoch's empire, is contemplating a $5.8 billion bid for UK property portal Rightmove Plc. The Australian real estate listing provider, under News Corp.'s control, is considering a cash and share offer, though it has not yet approached Rightmove or initiated discussions. REA's shares fell by up to 8% in Sydney, the largest drop since December 2022, due to concerns over potential stock issuance to fund the acquisition. Rightmove's market value stands at £4.38 billion ($5.8 billion), following a 3.5% decline in London trading this year.

A successful deal would enhance REA's scale, already a leading force in the Australian online real estate market with a presence in India. Rightmove's steady revenue growth and the anticipated rebound in the UK housing market as interest rates decrease make it a strategic target. Under UK takeover regulations, REA must announce its intentions by September 30 at 5 p.m. London time.

REA sees potential in combining the businesses, promising to inject investment and innovation into Rightmove. This could boost growth, margins, and shareholder returns. However, investors are cautious due to the challenges of overseas M&A and the need for a substantial equity raise.