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September 8, 2013 4:40 pm
Zoopla, the fast-growing UK online property portal, is the latest property company to consider a stock market listing as it seeks to challenge the dominance of sector-leader Rightmove.
The second-biggest operator of UK property websites by page views has appointed Credit Suisse to begin exploring “further strategic opportunities”. One of the most likely options is an initial public offering.
A float could value Zoopla at up to £1.3bn, or 50 times this year’s earnings before interest, tax, amortisation and depreciation, according to a report in The Sunday Times. That could generate a windfall of about £100m for Alex Chesterman, its founder and 9 per cent shareholder.
Government programmes to stimulate the housing sector, such as Help to Buy and Funding for Lending, have helped boost the market’s recovery and reignited investor appetite for property companies.
The UK property market is in the midst of a rush of dealmaking. Last month, London-focused estate agent Foxtons – famous for its green Mini Coopers – confirmed its plans to offer new shares and raise £55m. It follows the stock market listings of rival estate agent Countrywide and housebuilder Crest Nicholson earlier this year.
Over the past year Zoopla, which charges estate agents fees to advertise properties on its website, has stepped up its ambitions to challenge Rightmove, which dominates the UK property website market.
Last week Zoopla Property Group, the company behind Zoopla and Primelocation.com, acquired four property portals from Trinity Mirror. The group paid £3.3m for the websites, the biggest of which is SmartNewHomes.co.uk, a portal dedicated to new homes.
Mr Chesterman said it had “led the consolidation in the online property sector” since it launched in 2008 and was pursuing a strategy to develop niche digital property brands alongside its well-known national brand Zoopla.
Last week also saw the launch of the property portal’s new multimillion pound TV-led advertising campaign, in which the company promotes itself as helping homebuyers make “smarter” property decisions. The company said this was its biggest marketing campaign to date.
Sources close to Zoopla downplayed talk of any concrete plans for an IPO. The decision will be down to the property portal’s controlling shareholder Daily Mail and General Trust, publisher of the Daily Mail newspaper.
While Zoopla has consolidated its position as the second-biggest property portal group, its rival Rightmove continues to dominate the market. As of December last year, it had an 82 per cent share of page views on the UK’s top three property websites. Rightmove is Britain’s sixth most-visited website, ahead of the likes of BBC News.
Zoopla said: “As one of the fastest growing online businesses in the UK, our focus is on continuing to develop our brands and business in a sustainable way.”
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