Rupert Murdoch’s REA group buys ASX listed iProperty for $751 million

In one of the biggest acquisitions of Internet startups in Asia Pacific, Australian digital advertising group, REA Group, part of media mogul Rupert Murdoch's NewsCorp, has announced the buying of Malaysia-based iProperty Group Limited for $751 million.

iProperty provides online listings of properties for sale and rent in Malaysia, Singapore, Thailand, the Philippines and Indonesia. It was founded in 2007 by Australian serial entrepreneur Patrick Grove.

Deal in detail

REA Group subsidiary Realestate.com.au announced that all iProperty shares will be bought at the rate of $4 per share or $1.20 a share plus 0.7 shares in an unlisted company with indirect interest in iProperty, reports Herald Sun. The new private company owned by REA is BidCo.

The offer represents a 55 percent premium to iProperty's share price before REA took a stake in the company in July. The REA Group runs property sites in Australia, China, US, and Europe.

In its reaction, REA said the South East Asian real estate market is a growing market and is driven by “highly attractive macroeconomic factors” such as expanding populations and growing economies.

iProperty posted a revenue of $24.8 million in the first three quarters of 2015. The acquisition will also mark the exit for Patrick Grove and his Catcha Group, which is the largest shareholder in the company. Grove is Catcha Group's co-founder.

Peggy Lee, Catcha's director of corporate communications described the acquisition as fantastic for South-east Asian start-ups, reports Straits Times.

“This deal shows that sizeable companies can be built in South-east Asia and that global players are willing to write big cheques to move in,” she noted, adding it as an inspiration to entrepreneurs and investors that only $300,000 can turn into $751 million in eight years.”

Minority stake

REA Group took 17.22 percent of minority stake in iProperty in the year 2014. Hailing the rapid growth of the company that debuted in the Australian Stock Exchange for $0.25 in 2007, Grove said it is now offering a 16-fold return for all investors.

The iProperty boss said the sale is also indicative of the level playing field for property buyers in Australia. It will now help companies with opportunities to launch strong marketing campaigns. He also said Southeast Asia has proved to be a great place for global players to build “disruptive Internet companies.”

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