REA Group targets Rightmove takeover – but is there clear logic in the huge deal?
The following article (1st edition) appeared on the 4th of September and was written and compiled by Angela Hawksford Director, Asia Pacific, (Advanced Interactive Media Group LLC) and published by the aimgroup (Business Intelligence for Marketplaces & Classifieds).
Angela Hawksford, ‘If you’ve been in the industry long enough, the news this week that Australia-based REA Group was mulling a potential takeover of its U.K. peer, Rightmove, must have felt like déjà. Almost 20 years ago, the company had contemplated making the same deal. Spoiler: It didn’t go ahead — and may not now. But as one former REA executive told us: “Everything old is new again.”
REA Group, which is more than 60% owned by News Corp., has until September 30 to say whether it will make a bid for Rightmove or not. In that time, anything could happen. Another bidder may emerge, a private equity firm may throw its hat in the ring. Or the whole thing could fizzle out. If REA does make a bid, Rightmove’s shareholders could always knock it back. A realistic deal could cost around $6 billion U.S.
Huge offer required for takeover
“Rightmove is a darling of the London stock exchange,” Andrew Stanton, U.K. property expert and founder of Proptech-X, told the AIM Group. “For shareholders to give up their golden annual payout, a large offer would have to be on the table.”
That sentiment was shared by Susannah Streeter, the head of money and markets at investment firm Hargreaves Lansdown. “Given Rightmove’s strengths, it’s highly likely that if a bid is put forward by REA Group, the Rightmove board and shareholders are likely to hold out for a significantly higher offer,” she told us. If REA did make an offer, it would undoubtedly need additional financing to fund the acquisition.
Kane Hannan, an equities analyst at Goldman Sachs, estimated that the company could raise up to AUD6.6 billion ($4.4 billion U.S.) before News Corp.’s stake would reduce to below a controlling 50.1% shareholding. Will News Corp. stump up any cash? Should the takeover go through, News Corp. would effectively control three of the world’s Top 10 real estate marketplaces by traffic — Rightmove, RealEstate.com.au and Realtor.com (which it owns through its 80% stake in parent Move Inc.), based on the AIM Group’s ranking of the world’s leading property sites last year. And the company would probably become the world’s leading property marketplace group by revenue, overtaking Zillow.
Rightmove in need of a renovation
There is a strong feeling among many property observers in the U.K. that Rightmove needs rejuvenating. Stanton called Rightmove “a wounded dinosaur” that’s “failed to digitally transform its operations.” “REA Group invests in a lot of technology and innovation to enhance its digital platforms and services,” Stanton said. “This is the innovation piece that Rightmove, the ‘digital dinosaur,’ lacks. This is the value proposition. REA also has great expertise in the commercial real estate space, where Rightmove is weak at present and, of course, is a huge, sweet spot for CoStar Group, whose DNA is in commercial real estate.”
Glider, an innovator in information management solutions for the built environment, purchases EDocuments
This strategic move will enable the combined companies to offer expert support throughout the entire asset lifecycle, from design and construction to operation. As the construction industry evolves to meet new regulatory and sustainability demands, there is an increasing reliance on digital technologies for handover information and better asset information management. This acquisition provides the construction sector with a more structured approach to managing the growing amount of information generated during projects.
The Glider software platform, gliderbim®, provides a system of record for the collection, validation, and management of building information. Owners and managers of complex buildings or large, federated estates need this system of record to ensure compliance with regulations, efficient maintenance, and optimal building performance, protecting their investment.
The EDocuments platform addresses collaboration challenges across the Contractor supply chain throughout the construction process and has over 52,000 users. As well as collecting structured data, it offers robust dashboard tracking and search capabilities and facilitates collaboration with stakeholders to monitor progress effectively.
Together, the companies will combine their experience and software to simplify the digital handover process for contractors and their supply chain by creating accurate and structured digital handover information on mid-sized and complex construction projects so it can be used in operation.
Nick Hutchinson, Glider’s CEO and Co-Founder, stated: “Glider’s mission is to be the trusted system of record for built assets, and this acquisition is the first of many for us. Acquiring EDocuments significantly enhances our capabilities, enabling us to accelerate growth in the UK and internationally. I am excited to work with Lester, Chris, and Jamie to set new benchmarks in the industry and deliver unparalleled value to our clients.”
Property Sense agency launches proptech Place 3D to enhance its in-house capabilities
Property Sense, has launched a new proptech sister company called Place 3D. Which will unveil new proptech capabilities to the UK market, allowing clients to experience high-specification 3D visuals before a single brick has been laid. The technology also highlights live availability post-construction, allowing prospective residents to enjoy a seamless user journey during the lease-up/sales period.
It is a unique proposition that significantly enhances Property Sense’s block lettings capabilities and has already impacted the lease-up period at The Interchange development in Stockport. By creating an end-to-end property marketing solution that can be leveraged months before a development has been built, Place 3D can support developers of any size with rapid sales and/or lease-up periods, pre-and post-construction.
The platform can be accessed anytime and on any digital device, with no specialist skills required, offering an end-to-end promotional solution for the rapidly expanding BTR marketplace. Mike Haywood, CEO of Property Sense, said: “Without question, the BTR market is booming right now, with developers feeling the pressure to build more. We realised there was a gap in the market for high-quality, high impact proptech, that integrates seamlessly with our already powerful CRM and robust lettings processes.
“This is a game-changing offering for developers. Not only does it allow developers to generate significant, qualified demand months before building completion, but it also allows them to benefit from rapid lease-up periods never seen before in the UK.”
Andrew Stanton Founder & Editor of 'PROPTECH-X' where his insights, connections, analysis and commentary on proptech and real estate are based on writing 1.3M words annually. Plus meeting 1,000 Proptech founders, critiquing 400 decks and having had 130 clients as CEO of 'PROPTECH-PR', a consultancy for Proptech founders seeking growth and exit strategies. He also acts as an advisory for major global real estate companies on sales, acquisitions, market positioning & operations. With 100K followers & readers, he is the 'Proptech Realestate Influencer.'
