REA considering buying Rightmove?

REA considering buying Rightmove?

IF you have no idea who is REA or Rightmove, then you may skip this article already. REA Group is a giant for a company of its kind; real estate site. Rightmove is UK’s public listed real estate company. In other words, based on reports from media, a giant from Australia may consider buying a giant from the UK. How they could strategically benefit from this merger and acquisition would depend on a lot of factors but as usual, there may be cost benefits from sharing one team for continuous development of their services.

This may mean a lower cost, a faster turnaround of any new business direction or even having the expertise and experience from two different markets versus Rightmove just in the UK while REA is from Australia.

Article in nst.com.my Australian real estate firm REA Group said on Monday it was considering buying London-listed peer Rightmove via a possible cash and share offer, sending its shares down nearly 6.0 per cent.

REA Group, in which the Murdoch family owns more than 61 per cent, said it had not yet approached or had any discussions with Rightmove on a potential offer.

Rightmove, Britain’s largest property portal, had a market value of 4.36 billion pounds (US$5.73 billion), as of Friday’s close.

Last month, REA Group posted a rise in annual profit, lifted by higher national home listings in Australia. Rightmove, on the other hand, has flagged falling new home numbers in Britain.

The Australian company now has to either lodge a firm bid for Rightmove or back out by Sept. 30, according to the UK’s takeovers rule. Do read more details here: Article in nst.com.my

What can you do right now?

If you believe this is a great acquisition which will benefit both parties and you like to hold REA stocks to realize those benefits in the future, then it could be a buy. The stock price did fall after this was announced. In other words, some investors may be worried of the potential implications. Merger and acquisition is not easy to carry out successfully and will take some time.

If you believe REA may have to pay a high premium for Rightmove, then perhaps buying Rightmove’s share could be one potential bet you could also make. No one knows what’s the final price going to be or if there are other interested parties also coming into the picture for example. Just need to note that maybe the price paid may not be a premium versus the current share price too.

Alternatively, when we see these news, it’s quite a certainty that REA sees a brighter future in the near future yeah. So, you could also be more active in the property market too. If they buy Rightmove and Rightmove is leading in the UK, then it’s quite easy to note the potential of what the UK property market may have to offer too.

I have no idea what to do next. Happy deciding or letting me know what you think!

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