Former Realestate.com.au chief executive and shareholder Simon Baker says rumours the company will offer a takeover bid for French site SeLoger are most likely speculation rather than fact, claiming the deal would be too expensive.
The rumour comes after a period in which REA has scaled back many of its overseas ventures. During his time as chief executive, Baker pushed the company into some initial overseas expansion with plans to move into New Zealand.
“My guess is that it’s speculative,” Baker says. “For REA to come in and buy it, they’d have to offer significantly more money, and you have to ask the question – where are they going to get the money from?”
Baker points to a takeover offer lodged by Germany group Axel Springer last week for SeLoger, valued at 34 euros per share. This would value the company overall at 556 Euros, or $AU774 million.
Baker, who holds over three million shares in REA, says the decision by SeLoger to reject the German bid indicates REA would have to make a higher offer.
While Baker says the deal makes sense, with SeLoger controlling a majority of the recovering French real estate advertising market, he maintains it is simply too expensive.
“Would it make sense to acquire them? Absolutely. I like SeLoger, I think it’s run very well. But I think for REA it would be too expensive, and so I think this talk is more speculation.”
“For REA to do it, they would have to have a lot of funding from News, and you wouldn’t have the complete senior management team at a retreat at Hong Kong right now. You would be in the bunker trying to figure things out.”
News Corp holds a 60% stake in REA. The latter told SmartCompany this morning it would not comment on speculation.
REA sold some of its poorly-performing overseas assets over the past year after first moving into Britain, Belgium and the United Arab Emirates.
The company continues to hold investments in Hong Kong and Europe.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
