Rightmove Shares Soar Amidst Takeover Speculation

 

Rightmove shares went through the roof on Friday amidst speculation that it could be the target of a takeover bid by one of the big media houses.

Shares started the day at 715p and hit a record high of 796p, although finishing at around 740p. Buyers were urged on by news that France’s equivalent of Rightmove, seloger.com, after reporting a 20% growth in profits to €10.4m for the first half of 2010, looks set to be snapped up by a European publishing giant.

German firm Axel Springer plans to launch a €34 per share public offer for the French portal in a deal which values it at €566m – about £468m.

Axel Springer has already agreed to buy approximately 12.4% of the shares in seloger.com for around €70m and now intends to launch a public offer for the remaining 14.5m shares.

“Classified advertisements have been a core business of Axel Springer since the inception of the group,” said Dr Mathias Döpfner, Axel Springer CEO. “We are seeing a rapid migration of classified advertising from the print to the online world, and Axel Springer has already established itself as a major online player in several European markets.” Axel Springer publishes over 175 titles in 30 countries and has a track record in wanting to make serious media purchases in the UK. In the past, it has looked to buy the Telegraph and Independent newspapers.

The news from across the Channel propelled Rightmove shares to their highest since flotation in 2006. Analysts at brokers WH Ireland said Rightmove’s grip on the number one slot in online property advertising is “unassailable” and “near monopolistic” – not what Rightmove’s UK competitors want to hear.

Rightmove is very cash generative and could represent a relatively cheap trophy asset for the right media house, said analysts. Rightmove’s profits make its French counterparts look tiny. Last year it made nearly £42m in profits, and for the first six months of this year reported underlying profits of £26.8m.  

 

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