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ZPG agrees £2.2bn takeover by US private equity firm Silver Lake
Zoopla and PrimeLocation owner ZPG has agreed to be bought by US private equity firm Silver Lake Management for 490p per share in cash, or £2.2bn.
The price represents a 31% premium to the closing price of ZPG on Thursday.
ZPG founder and chief executive officer Alex Chesterman said: "Silver Lake is the global leader in technology investing and I am firmly of the belief that ZPG will benefit from their technology expertise and global network which will help accelerate our growth. In 2008, we transformed the property portal landscape with the introduction of a highly differentiated proposition providing data and delivering transparency to empower consumers to make smarter property decisions.
"Since its IPO in 2014, ZPG has evolved and diversified as we have made significant progress in becoming the platform of choice for consumers and partners engaged in property and household decisions."
Chesterman said the terms of the deal represent an attractive premium that recognises the quality of ZPG's businesses and the strength of its future prospects.
Daily Mail and General Trust, which owns just under 30% of ZPG's shares, has already given irrevocable undertakings to accept the deal, which it said was consistent with its "strategic priorities of increasing portfolio focus and enhancing financial flexibility".
Chief executive Paul Zwillenberg said: "The recommended all cash offer for ZPG promises to deliver a very significant return for DMGT. The sale of our stake, pending shareholder approval at ZPG, fits with our long track record of successfully identifying new opportunities, incubating young businesses and supporting their growth to create value for shareholders."
Liberum said the price represents a 24.7x annualised estimated 2018 price to earnings, showing that there are buyers prepared to pay "punchy" multiples for high quality assets.
"The question now is whether there is a counter-bid. If there is one, we think the most likely candidate is Axel Springer, which has a collection of online property classified assets throughout assets but nothing in the UK, although - interestingly - they recently took a stake in Purplebricks.
"Axel Springer has a market cap of 7.2bn and is on less than 1.5x consensus YE18E net debt/EBITDA. Obviously a big positive on ZPG, which has been our preferred pick in the portals space."
David Madden, market analyst at CMC Markets, said: "When you take into account that ZPG's all-time high share price was 401p - in March 2017, it is clear that Silver Lake is making a generous offer."
At 0850 BST, ZPG shares were up 30% to 486.80p.