The much talked about management buyout of propertfinder.com in the UK has failed however a new mystery buyer has emerged. In a late announcement on the ASX, the REA Group & News International have entered into a non-binding heads of agreement for the potential sale of their UK online business.
Internal sources say there were three “very detailed and strong bids” however the while the existing management put in a “very impressive bid”, they were not the preferred option.
A period of exclusivity has been entered with the preferred bidder so that they can undertake due diligence and the identity of the preferred bidder might be revealed as soon as the end of next week. Given the comment in the ASX release that “if this transaction successfully proceeds to completion, it is unlikely to have any impact on the guidance (already) provided”, the offer being considered is likely to be small.
The REA Group and News International have also kept the door open to close the business or just sell the assets to the preferred bidder as they continue the consultation process with staff – a prelude to closure.
So who is the mystery bidder?
Well we don’t know who the mystery bidder is however speculation is that it could be one of DMGT, Trinity Mirror, GMG, or the outsiders Zoopla and Rightmove.
It would make sense for DMGT to buy Propertyfinder. They are currently competing with Propertyfinder as well as Rightmove and by acquiring Propertyfinder, they would remove a competitor (and distraction) from the market, gain more customers, and have a clear run at Rightmove. It is believed that the REA Group and News International came close to doing a deal with DGMT earlier this. Perhaps with the announcement of potentially closing the business, DMGT has come back with a bargain basement offer for the asset of Propertyfinder.
Trinity Mirror has made a range of acquisitions in the online property space. These include email4property, fish4homes, homemaker, homesoverseas, smartnewhomes, and zoomf. However, none are in the same league as the top 4 sites and therefore it would not be surprising to see them acquire Propertyfinder.com to add to their portfolio of companies.
Guardian Media Group (GMG) has invested heavily in market leading back end solutions with the likes of Vebra. They launched Thinkproperty a few years back with the hope of taking on the market leaders however this didn’t eventuate. There is a chance that they could be an acquirer of Propertyfinder, however this is more of an outside chance.
Zoopla has recently made a lot of noise in the UK market and is gaining some readership. While initial progress has been good, it is still to capture the levels of traffic that Propertyfinder and the other members of the top 4 have achieved. Rumours have it that they may be interested in Propertyfinder – especially from a traffic perspective. They could be a dark horse in the process.
Finally, we would be remiss if we didn’t speculate about Rightmove. Strategically, Rightmove want Propertyfinder to remain it the market. It keeps the DMGT sites of Findaproperty and Primelocation partially distracted and therefore gives Rightmove more clear air in furthering their market leadership. If they are the acquirer of Propertyfinder, expect them to keep Propertyfinder in the market as a foil for DMGT.
While the potential acquirer is unknown, our best guess is that it may be DMGT or Trinity Mirror.