News Plunges Into Realestate.com.au
The Age
Friday December 1, 2000
A week after News Corp shut down its loss-making electronics e-tailer buy.com Australia, Rupert Murdoch's media empire has announced it will invest $10.75 million in realestate.com.au, giving it a 44.2 per cent stake in the group.
It is believed John Fairfax Holdings, the owner of The Age, came close to snaring a deal with realestate.com.au last month via its f2 subsidiary, before negotiations broke down.
Under the deal yesterday, News Corp will acquire 40 million shares in the Macquarie Bank-backed online property group, with an option to buy a further 10million of shares by 2005.
The plunge by News Corp comes as the Queensland-based property information company RP Data tries to take over realestate.com.au. Its offer values the website at $10million.
Mystery still surrounds the reason why RP Data slashed its original takeover offer by $6 million to $10 million, with the Queensland company saying the revised offer was made after due diligence.
Meanwhile, News Corp has agreed to provide realestate.com.au with $2.25 million in cash, a range of advertising and marketing services, and co-branding with 94 Murdoch-associated suburban newspapers.
News Corp will also bring to the deal the weight of its suburban newspaper sales force, which will actively sell realestate.com.au's services. News Corp will transfer its Home Online division to the company and provide a number of sophisticated technology services.
While News Corp will acquire the outstanding amount of Macquarie Bank's loan facility with realestate.com.au, Macquarie will retain a significant interest in the company.
© 2000 The Age