Rightmove’s shares have been shooting up – and this may bring forward a decision by Zoopla to join its rival on the stock market.
On Friday, Rightmove shares surged 29p to £23.67 on the back of positive data about UK house prices and an announcement that Countrywide, the UK’s largest estate agency and lettings chain, has signed up to Rightmove for five years.
Rightmove said the membership arrangement will run until December 31, 2018.
Rightmove now has a valuation of £2.4bn against the £306m it was valued at when it floated in March 2006. Shares were then £3. In comparison, US brokers Morgan Stanley last week gave the shares a target price of £30.
Another broker, Westhouse Securities, gave its target at £25.70. Analyst Roddy Davidson at Westhouse said: “Our recommendation is based on a positive view of prospects for the housing market, which should filter through to agents’ marketing spend, new branch openings and new-build activity.
“We expect the Government’s Help to Buy initiative will help stimulate a market that appears to be already showing clear signs of recovery.”
Countrywide’s own shares rose 8p to 548p on Friday. It launched on the stock market earlier this year at 350p.
Its new tie-up with Rightmove is intriguing, since Countrywide founded Rightmove but is now a shareholder in Zoopla and its boss Grenville Turner sits on the Zoopla board as a non-executive director.
Zoopla is mulling its own expansion plans, including a possible float on the stock market.
See also next story.
Last October, Countrywide reported that more of its leads came from Zoopla than from Rightmove. It said 35% of its leads came from Zoopla, 35% from its own website and 30% from Rightmove.
The other corporate shareholders on Rightmove are LSL and Connells. Connells sold its 17% stake in Rightmove at 155p in 2008. That stake would now be worth almost £425m.
Comments
@sooth sayer - I like it, could be a conspiracy going on here.
Actually it's probably not as far from the truth as you imagine, just think, five years down the line one huge national (but privately owned) estate agency incorporating all the properties in the UK on one massive portal.
Wouldn't that be less stressful eh!
At least agents won't need to worry about advertising costs because they'll all be working for the same monster.
Actually this could be Trevor's MLS model taken to the extreme.
"Its new tie-up with Rightmove is intriguing, since Countrywide founded Rightmove but is now a shareholder in Zoopla and its boss Grenville Turner sits on the Zoopla board as a non-executive director."
Isn't it obvious, within the next five years, there will be no duopoly, there will be one big portal called Rightla or Zoopmove.
Pooling their resources to take over the real estate world.
Then with Grenville Turner's input, this monster will transform itself from a portal, into an online agency.
Eventually we as agents will be stuffed unless we swear allegiance to this monster, sign over our branding to them and become part of the Zoopmove/Rightla empire.
Faceless sales people promoting the same properties with vacant eyes and fixed smiles.
I have foreseen this in the flickering flames of the burning money I spend with them every month.
We are all doooommmmeeeed I tell's ya.
Why all the mentioning of portals and not one idiot has mentioned about allagents being purchased by them?? Come on AA wake up!
One has to wonder what sort of discount countrywide got for agreeing to pay for 5 years. I am sure the rest of us will find out shortly when our premiums are hiked again. The only question is will Countrywide support Agents Mutual (AM), if they do its disastrous for Zoopla and their own shareholding in it. As countrywide would have to withdraw from Zoopla under AMs rules. More likely they sign a big deal with Zoopla as well and AM will go on without them.
I'd see this completely the only way to be honest 'Go back to banking' the fact that Zoopla and now Right Move have been out trying desperately to sign some of the biggest agents up to 5 years deals is a sure sign that they think there is some mid to long term threat.
@ something's fishy
volume is easy. quality and conversion is key.
i've always been curious to understand why zoopla produce so many general leads. are you not more concerned about that? their site layout isn't much different to rightmove.
So Rightmove produced less leads but will now enjoy a five year sign up?
maybe someone at countrywide realised that quality of lead is paramount and factored that into their considerations and discounted useless general emails.
Rightmove is still the bigger site and will hence produce more usable leads. and no i don't work at rightmove....just hacked off with large volumes of general emails from zoopla. why bother? oh yes...so they can quote headline figures. anyone else still suffering this?
With all these agents committing to both Zoopla and Right Move for the long term things look bleak for Ian Springett and his merry men....
mmmm, looks like RM are getting worried to me! Will we all have to sign up for 5 years now? God, what kind of crappy no use upgrades will they force on to us?