REA Group Ltd

REA: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$914.00	Hkzht	Swqdqhb

REA Group: No Further Offers for Rightmove

Roy Van Keulen

Oct 1, 2024

We lower our fair value estimate for wide-moat REA Group by 2% to AUD 123 per share following the company’s announcement that it does not intend to make a further offer for Rightmove, a United Kingdom-based marketplace for property, at this time. We now ascribe zero probability of the transaction taking place from 25% previously. The decrease in our fair value estimate comes from our view that the acquisition could have been around AUD 10 dollars value-accretive. REA Group’s management cites a lack of substantive engagement by Rightmove’s board, as well as REA Group’s adherence to a disciplined mergers and acquisition framework, as reasons for not further pursuing the acquisition.

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