Further to the news, iProperty shares jumped over 9 per cent to close at A$3.84 today on the Australian Stock Exchange (ASX), while REA stock ended 1.7 per cent up at A$48.87. Shares in iProperty lifted nearly 10 per cent on the news on Monday, closing 33 cents higher at $3.84. On a pro-forma basis the acquisition will be mildly dilutive but iProperty is expected to continue to grow strongly and in line with iProperty’s current revenue growth guidance.
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REA Group Limited (REA) has acquired iProperty Group Limited.
“The acquisition of iProperty is the logical extension of REA’s market leading business in Australia and marks the next step in its strategy to pursue strategically sound expansion into attractive markets”, REA Group chief executive Tracey Fellows said in a statement.
The $4 per share offer represents a 55 per cent premium to iProperty’s share price before REA took a stake in the company in July when the stock was changing hands at $2.58.
The iProperty directors, who are not REA nominees, have recommended that iProperty shareholders vote in favour of the Scheme, subject to no superior proposal emerging and an Independent Expert giving an opinion that the Scheme is in the best interests of iProperty shareholders.
iProperty is a leading South East Asian property company with portals in Malaysia, Hong Kong, Thailand and Indonesia.
REA, which also has online assets in the USA and Europe, expects the acquisition to be completed in the first quarter of 2016.
The acquisition will be funded from new debt facilities of $480 million with the remainder from cash reserves.
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Citigroup Global Markets Pty Ltd is acting as financial adviser to REA on the deal.
