Good morning! A couple of interesting bits of news today:


  • Share price: 489.4p (+30%)
  • No. of shares: 438 million
  • Market cap: £2,145 million

Recommended cash acquisition of ZPG Plc

After just four years on the market, it looks like Zoopla will be returning to private hands. The ZPG Board recommend voting in favour, and 31% of the votes have already been promised (30% from Daily Mail and General Trust P L C (LON:DMGT) and 1% from the ZPG Directors).

It's a large transaction, even for SilverLake, which calls itself "the global leader in technology investing." GIC (Singapore's sovereign wealth fund) and a Canadian pension fund will also be participating.

With the bid priced at 490p, today's share price says that there is little doubt it will be voted through.

SilverLake promises to actively improve ZPG's performance:

In addition to its in-house value creation team, Silver Lake has a strong network of portfolio companies and contacts in the sector which can bring value to ZPG's operations through operational improvements

But the existing management team, brand and culture will be preserved:

Bidco expects the existing personnel of ZPG to continue to contribute to the success of ZPG following completion of the Acquisition, and does not intend to initiate any material headcount reductions within the current ZPG organisation as a result of the Acquisition.

No "material" headcount reductions - an important proviso. It's still possible that there could be some redundancies.

Brokers were forecasting EPS of c. 17.6p this year, so the bid is at a hefty 28x earnings.

The read-across to Rightmove (LON:RMV) is very positive. Rightmove is forecast to make EPS of 179p this year, and a similar earnings multiple applied to it would result in a share price of c. 5015p.

I would argue Rightmove deserves a higher multiple than ZPG. It's up nearly 7%…

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