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Publishing industry

News Corp Makes Takeover Offer for realestate.com.au

Strategic Insights

— 1 min read

News Corp's Australian operations have made a takeover bid for realestate.com.au, offering $2 per share for the stock it does not already own, taking its holding in the online real estate business to 43.69%. The offer is described as a straightforward full cash offer with limited conditions, providing REA shareholders with the opportunity to exit or retain part of their investment. The purchase is subject to approval under the Foreign Acquisitions and Takeovers Act, and News Ltd has already acquired an additional 3% of REA shares from ninemsn Pty Ltd.

Key Takeaways:

  • News Corp's Australian operations have made a takeover offer for realestate.com.au, with a price of $2 per share, which represents a premium to the price of REA shares up to July 29.
  • The offer is unconditional, with no minimum acceptance condition, and will provide REA shareholders with the opportunity to exit or retain part of their investment.
  • News Corp's holding in realestate.com.au has increased to 43.69% following the acquisition of an additional 3% of shares from ninemsn Pty Ltd.
  • The purchase of the additional 3% of shares was made for a consideration of $0.82 million.
  • The offer is subject to approval under the Foreign Acquisitions and Takeovers Act.
  • realestate.com.au is on track to deliver a profit before tax of between $5.0 million and $6.2 million in 2004/05, more than double the $2.5 million result recorded in the previous year.
  • John Hartigan, News Ltd chief executive, stated that the offer represented fair value for REA shareholders.

Statistics:

  • Price per share: $2
  • Total shares to be acquired: not specified
  • Consideration for the additional 3% of REA shares: $0.82 million
  • REA shareholders exit value: $2 per share
  • REA profit before tax (2004/05): between $5.0 million and $6.2 million
  • REA profit before tax (previous year): $2.5 million
  • % increase in REA profit before tax (2004/05): 100-144%
  • REA shares price: $1.73 (closing price on August 1)

Sources:

  • News Corp (ASX: NWS)
  • realestate.com.au (ASX: REA)
  • ninemsn Pty Ltd
  • Australia Securities Exchange (ASX)
  • ASIA PULSE, "News Corp makes offer for realestate.com.au" (August 1, 2004)

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