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Australian property listing group REA is considering a takeover bid for London-listed rival Rightmove.
REA, 61 percent owned by the Murdoch family’s News Corp, said on Monday it is considering a cash-and-shares offer for the FTSE 100 firm.
The group told shareholders that a potential bid could be a “transformational opportunity”, creating a “diversified, global digital property company, with No. 1 positions in Australia and the UK”.
REA has until 30 September to declare its firm intention to submit a takeover bid for Rightmove
But REA shares fell sharply following the announcement, losing as much as 8 percent at one point, putting them on track for their worst day since December 2022.
REA, which has not yet contacted Rightmove regarding a potential offer, said a combination with the company “would represent a highly attractive investment opportunity for both REA and Rightmove shareholders.”
Rightmove shareswhich rose more than 23 percent in early trading, have struggled to maintain momentum in recent years. They are down 1.1 percent over the past 12 months and have gained just 2.5 percent over the past five years.
It had a market capitalisation of £4.36bn at Friday’s close.
While the company was forced to cut its advertising revenue forecasts earlier this year, Rightmove expects revenue growth of 7 to 9 percent for the year.
REA said the combination would also combine “robust growth with strong margins and significant cash generation, enabling continued capital appreciation and shareholder returns.”
The group added: ‘REA has a long history of growth and has demonstrated a track record of developing businesses over decades to create world-leading platforms that have transformed the way people experience property.
‘By acquiring Rightmove, REA would seek to improve the UK property experience for buyers, sellers and renters, supporting Rightmove’s vision of “giving everyone the confidence that they can take the plunge” whilst also positively contributing to the property market ecosystem with investment and innovation.’
Under City rules, REA must declare a firm intention to bid for Rightmove by September 30.
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