Onthemarket shares leap 53 per cent after £99m takeover deal as rival Rightmove falls
Onthemarket shares made their biggest one-day jump on record after the UK property portal was snapped up by American commercial property giant Costar in a £99m deal, while rival Rightmove slumped.
The London-listed stock rose as much as 53 per cent on Thursday morning to 108p.
The takeover is the latest in a series of acquisitions by Costar in recent years, including a $156m deal with real estate website Homes.com in 2021.
Costar called the acquisition of Onthemarket an “attractive strategic entry point” into the UK residential property market, with the deal representing a 56 per cent premium to the stock’s 70.5p closing price on Wednesday.
“Onthemarket is the latest UK stock to receive a takeover offer, making it feel like a near-daily event as private equity and trade players seek to take advantage of cheap valuations on the UK market,” said Russ Mould, investment director at AJ Bell.
“It’s a classic move – a US business that is already an expert in the same sector is using the acquisition of a London-listed stock to expand into a new segment of the UK market. In Costar’s case, the deal will give it a foot in the door for the UK residential property sector.”
The deal is set to make Onthemarket, launched in 2015, a bigger threat to competitors like Rightmove and Zoopla.
Rightmove’s shares plunged 12 per cent to a three-month low following news of the deal today.
“The incoming might of the US real estate information and analytics group will beef up On The Market’s ability to be a much more powerful rival for Rightmove,” Hargreaves Lansdown analyst Susannah Streeter told City PM
“It’s already a difficult time Rightmove given the deterioration in the UK market, with buyers increasingly cautious about making a move when interest rates are so high, and this extra competition is set to make conditions even tougher.”
Onthemarket warned of challenging macroeconomic conditions which may impact its annual revenue in a trading update this morning.