Shares in Rightmove took up residence at the top of the FTSE 100 today, after international bid interest in the company energised its stock.
REA – Australia’s biggest property website, owned by Rupert Murdoch’s News Corp – confirmed it was interested in bidding for the company, which has a market value of around £4.4 billion.
Shares in Rightmove surged by almost a quarter, adding nearly 135p to 690p.
Any deal for Rightmove could make it the latest major UK name to leave the FTSE 100 after being acquired.
Richard Hunter, head of markets at Interactive Investor, said the potential deal showed the bid interest in the UK’s biggest firms remained a major factor in the market.
“Given cheap valuations on a historical basis as well as in comparison to many developed markets elsewhere, the UK has inevitably become something of a hunting ground.”
REA confirmed it was considering “a possible cash and share offer” pointing to “clear similarities” between it and the potential target, adding:
“The REA Board believes the enlarged group would represent a highly attractive investment opportunity for both REA and Rightmove shareholders”.
It also said: “REA has not approached, nor had any discussions with, Rightmove regarding any potential offer”.
Rightmove is the UK’s biggest property portal and is often the place where buyers and sellers take their first steps toward transactions.
There are hopes that falling interest rates will help re-energise the house market, which slowed with the cost of borrowing at a 16-year high to 5.25% as the Bank of England fought off high inflation with 15 consecutive rate hikes. It is now at 5%, with further cuts expected.
Rightmove floated on the London Stock Exchange in 2006, six years after it was founded by what were then the UK’s top four estate agents, Countrywide, Connells, Halifax and Royal and Sun Alliance. Having at first offered free listings, it started charging for them in 2002.
It reported underlying operating profit of £264/6 million for 2023, from revenue of £364.3 million, up 10%. It advertised and average of almost 850,000 properties each months and people spent 15.4 billion minutes on the site in the year.
