REA Group Ltd (ASX: REA) share price is having a strong session on Thursday.
At the time of writing, the online property listings company's shares are up 3% to $198.50.
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Why is the REA Group share price rising?
Investors have been buying the realestate.com.au operator's shares today following the release of two announcements.
The first announcement reveals that UK online property listings company Rightmove (LSE: RMV) has rejected REA Group's improved takeover offer.
The market hasn't been particularly keen on the move. As a result, they may believe this is the end of the road for the deal and are bidding up the REA Group share price in response.
Commenting on the rejection, the company stated:
REA confirms that on 24 September 2024 the Board of Directors of Rightmove rejected the Further Improved Proposal. In their rejection, the Board of Directors of Rightmove characterised the Further Improved Proposal as unattractive and materially undervaluing Rightmove.
REA is disappointed by the latest rejection from the Board of Directors of Rightmove and is frustrated that, save for the rejection of REA's three previously disclosed proposals, REA has still had no substantive engagement with Rightmove.
The company has urged Rightmove shareholders to pressure its board into engaging. However, time is not on the side of REA Group with this one. UK takeover laws mean that it has until 30 September to make a firm offer. After that date, it will need to wait six months before it can return with another offer.
What else was announced?
Not everyone is rejecting REA Group's advances.
Another announcement reveals that the company has agreed to acquire a 19.9% interest in Athena Home Loans for $62 million. It is a leading digital non-bank lender and one of Australia's fastest growing fintechs.
The consideration for the transaction has been funded from the company's existing cash reserves. REA will take two seats on Athena's board.
The two parties certainly aren't strangers. REA and Athena first formed a strategic partnership in 2022, bringing together Athena's home loan products with the distribution network of REA's financial services brand, Mortgage Choice.
In June 2023, REA launched the Mortgage Choice Freedom suite of white label products, developed in collaboration with Athena, which exceeded expectations by delivering $1.2 billion in settlements in FY 2024.
REA Group's CEO, Owen Wilson, was pleased with the agreement. He said:
REA's proposed investment in Athena will further enhance our existing partnership and reinforces our commitment to providing Australian homebuyers with greater choice and a seamless consumer experience when finding and financing property.
Growing our national broker network and evolving our digital mortgage offering for the 12 million Australians who now visit realestate.com.au1 is an important part of our financial services strategy. An equity investment builds on the success of our innovative Mortgage Choice Freedom home loan products and forms a strong alliance to support the delivery of our strategy, while also benefitting from Athena's growing loan portfolio.
The REA Group share price is up 26% since this time last year despite recent wobbles.
