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REA shares fall 8%, face worst session since December 2022

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Takeover move suggests capital risks, says analyst

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REA must announce intention by Sept. 30 under UK rule

(Rewrites throughout, adds further details and background and

analysts' comments)

By Aaditya GovindRao and Rishav Chatterjee

Sept 2 (Reuters) - REA Group ( RPGRF ), majority-owned by

News Corp ( NWSA ), is considering buying British property

portal Rightmove ( RTMVF ) to create a multinational digital real

estate firm, the Australian company said on Monday.

Britain's largest property portal, Rightmove ( RTMVF ) had a market

value of 4.36 billion pounds ($5.73 billion) as of Friday's

close. It makes money from listing real estate agents on its

website.

Shares of REA, in which the Murdoch family-controlled media

firm News Corp ( NWSA ) owns a more than 61% interest, fell as much as 8%

to A$201.5 and were on track for their worst session since

December 2022.

The stock was last down 7.7% at A$202.16 after a trading

pause earlier in the day.

"Despite the potential long-term benefits of a strategic

acquisition, the takeover move suggests capital vulnerability

and risks," said Junvum Kim, Saxo Asia Pacific senior sales

trader at Saxo Markets.

REA said it was considering a possible cash and share offer

for London-listed Rightmove ( RTMVF ). It, however, said it had neither

approached nor held any talks with Rightmove ( RTMVF ).

The Australian real estate company now has to update the

market if it has a firm intention to make a bid by Sept. 30.

Rightmove ( RTMVF ) did not immediately respond to a Reuters' request

for comment.

"For this negotiation to be successful, it is essential for

REA Group ( RPGRF ) to clearly communicate to shareholders the potential

benefits of this opportunity," said Ben Williamson, co-founder

and co-CEO at trading platform InvestorHub.

"If it's a good deal, the company shouldn't let the initial

response from investors determine whether or not it proceeds

with the deal."

Early last month, REA reported a jump in annual earnings and

raised its dividend. It said residential demand remains strong

nationally and with decade-high interest rates being put on

hold, positive market fundamentals and robust supply should

support consumer confidence.

The Australian market expects likely interest rate cuts in

the near future to bring back buyers to the property market.

($1 = 0.7613 pounds)

(Reporting by Aaditya Govind Rao and Rishav Chatterjee in

Bengaluru; Editing by Subhranshu Sahu)