The prospect of Rightmove becoming the target of a multi-billion pound bid from REA Group, a rival Australian listings company, drove shares in Britain’s largest online property portal to the top of the FTSE 100 leaderboard.
By the close of trading in London on Monday Rightmove stock had risen by 27.4 per cent, or 152.40p, to 708p, valuing the business at £5.6 billion. Rea Group told the Australian stock exchange that it was considering a cash-and-shares offer for the British property search website.
In a statement to the London Stock Exchange after the end of trading Rightmove said it noted Rea’s announcement adding that “any offer for Rightmove is governed by the City Code on Takeovers and Mergers” and that Rea had until 5pm on September 30 to make an offer or walk away.
Rightmove was formed in 2000 by the Countrywide, Connells, Halifax and Royal & Sun Alliance estate agencies and was floated on the London Stock Exchange in 2006.
It is seen as the go-to website for those looking to move home in Britain. In the first half of 2024, Rightmove boasted an 86 per cent share of the house search market and its revenue rose by 7 per cent to £192.1 million between January and June compared with the same half last year.
Its pre-tax profit grew by 2 per cent to £132.7 million. The company has high margins. For every £1 spent by estate agents and developers with Rightmove, it made 69p of profit in the first half. About 19,000 estate agents and developers advertise on the portal.
Rea is 61 per cent-owned by News Corp, the owner of The Times.
It was founded in 1995 and is one of the 20 largest companies on the Australian stock exchange, with a market capitalisation of A$27.3 billion (£14 billion). Last month Rea reported a jump in annual earnings and raised its dividend.
“The board believes that there are clear similarities between Rea and Rightmove in terms of their leading market positions in the core residential business,” Rea said in a statement.
News of the possible takeover was first revealed in the Australian Financial Review’s Street Talk column, which said that Rea had appointed Deutsche Bank as its financial adviser and was considering a big transaction.