UK housing portal Rightmove surges as Murdoch's REA considers bid
Business
UK housing portal Rightmove surges as Murdoch's REA considers bid
(Reuters) - REA Group, the property listings company majority owned by News Corp, is considering buying Rightmove to create a global real estate company, the Australian firm said on Monday, sending the British housing portal's shares soaring.
Shares in London-listed Rightmove surged as much as 27.6% to 7.09 pounds, giving it a market capitalisation of 5.59 billion pounds ($7.35 billion).
REA said it was considering a possible cash and share offer for Rightmove. However, it said it had neither approached nor held talks with Rightmove.
Britain's largest property portal Rightmove said it has not received any approach from REA about a possible offer.
Analysts at Investec in a note agreed with REA that the offer and the enlarged group presents a highly attractive investment opportunity, given an easing interest rate environment in the U.K. and recent new investment starting to pay off.
Shares of REA, in which the Murdoch family-controlled media firm News Corp owns a more than 61% interest, fell as much as 8% before closing 5.3% lower at A$207.4, one of the day's biggest losers on the benchmark.
If the deal goes through, it would be the largest so far this year in which an Australian firm buys an overseas company, data from LSEG showed. It would also be among the largest deals for a UK-listed company this year.
REA now has until Sept. 30 to make a formal offer for Rightmove or walk away under UK takeover rules.
"Despite the potential long-term benefits of a strategic acquisition, the takeover move suggests capital vulnerability and risks," Junvum Kim, Saxo Asia Pacific senior sales trader at Saxo Markets, said about the potential deal for REA.
