Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
magazineRightmove shares endure a big hit as US real estate giant CoStar agrees OnTheMarket deal
Shares in property listings site Rightmove (RMV) have taken a battering since US real estate giant CoStar (CSGP:NYSE) announced a £99 million all-cash offer for rival OnTheMarket (OTMP:AIM).
The US real estate giant intends to turn OnTheMarket into a ‘market leader’ which could put pressure on Rightmove’s dominant market share in the UK.
CoStar already runs US websites Homes.com, LoopNet.com and Apartments.com.
Analysts at Jeffries noted Rightmove has relied on price increases on its subscriptions rather than selling new products to generate growth for some time.
‘CoStar has a track record for these types of acquisitions and has stated that it intends to fund a multi-year, multi-£100 million investment programme to displace Rightmove as the number one in residential property in the UK,’ added the Jefferies team.
As CoStar has ‘thrown down the gauntlet’ with this OnTheMarket offer, Rightmove will have to put up a fight.
It may prove hard to unseat from its market leading position as this creates a virtuous circle. Its site has the most listings and is therefore the one which prospective property buyers will go to when looking for their next home. This reinforces its position as a must-have product for estate agencies and gives it significant pricing power when it comes to securing subscriptions from agencies.
Important information:
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
Issue contents
Exchange-Traded Funds
Feature
Great Ideas
News
- Tesla investors left sweating over scope for margins recovery
- Netflix ‘turnaround complete’ as cash flow soars in the third quarter
- Big medical breakthrough drives huge gains in Oxford Biodynamics shares
- Why global bond yields continue to shoot up and what it means
- Rightmove shares endure a big hit as US real estate giant CoStar agrees OnTheMarket deal
- Margins may hold the key to PayPal recovery
- Grocery chain Sainsbury’s needs to deliver on earnings and guidance
- ‘Writing on the wall’ for open-ended property funds as M&G closes once popular product
