REA seeks full iProperty portal ownership with $4 per share bid
REA Group has announced its desire to fully acquire the iProperty Group in a deal that values iProperty at around $750 million.
The remaining 77% stake will cost about $575 million given REA has built up a stake of 22% in the south-east Asia online property portal.
"iProperty's board, management and staff have done a tremendous job of building iProperty from an emerging start-up, to occupying leadership positions in key markets," Real Estate Australia chief executive Tracey Fellows said today.
"This acquisition will bring iProperty and REA's existing portfolio of digital real estate advertising business and enable the business to take the next step in its evolution," Tracey Fellows said.
iProperty operates real estate websites in Singapore, Malaysia, Hong Kong, Macau, Indonesia, Thailand and the Philippines, though Tracey Fellows noted the transition from offline real estate advertising to online was at an earlier stage than in Australia "but is accelerating and represents an enormous monetisation opportunity."
"South East Asia is underpinned by highly attractive macroeconomic factors with strong growth prevalent across the region.
"The real estate market is expected to continue to grow driven by expanding populations and increasing GDP per capita, with the acceleration from offline to online advertising presenting an enormous opportunity for iProperty," she said.
Under the proposed transaction, iProperty shareholders will receive cash consideration of $4.00 per share.
As an alternative, iProperty shareholders will also be able to elect mixed consideration comprising of $1.20 in cash and 0.7 shares in a newly formed, unlisted public company, which will own an indirect interest in iProperty.
REA will fund the acquisition primarily from new debt facilities totaling $480 million, with the remainder from existing cash reserves.
REA’s leverage will be approximately 1.5x net debt / EBITDA on a pro forma FY15 basis but is expected to be lower by the time the transaction completes.
