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Investing.com -- Fresh speculation over a potential sale of Zoopla has revived competitive risks for Rightmove, Jefferies said on Monday, warning that structural changes in the UK property advertising market could weigh on the sector leader.
Sky News reported that Silver Lake, which took Zoopla’s parent ZPG private in a £2.2bn all-cash deal in 2018, has hired JPMorgan and Arma Partners to advise on a possible break-up.
The report said a separation of ZPG’s assets was the most likely outcome within the next 12 months.
ZPG owns Houseul, which controls Zoopla, Alto and Hometrack, and RVU, which holds Confused.com, uSwitch.co.uk and Money.co.uk. The company has not commented.
Jefferies analysts said the move sets up the prospect of a reshaped competitive landscape for Rightmove , which dominates UK property listings with a 75% share of traffic.
“M&A is hard to predict, but we think the catalyst path is set for a transformational change in market structure in UK property advertising, with negative implications for Rightmove,” the brokerage said.
The analysts flagged three new developments since its April note on a potential Zoopla sale. First, Silver Lake’s formal appointment of advisers signals progress in the process.
Second, U.S. commercial property group CoStar has completed its acquisition of Domain in Australia, potentially freeing management bandwidth for further consolidation.
Third, Rightmove’s valuation has stretched in the absence of competitive news, with the stock trading at a peer-group-high 2.4x 2025 estimated PEG ratio compared with rivals at 1.5x to 2.0x.
Rightmove’s shares closed Friday at 726.40p, valuing the company at £6.1 bln. Jefferies maintained an “underperform” rating with a price target of 485.00p, implying 33% downside. The stock has traded between 827p and 586p over the past year.
Additional trading metrics underline Rightmove’s prominence in UK equity markets. The company has a free float of 91.8% and an average daily value traded of $15.57M. Its London Stock Exchange ticker is RMV LN .
Rightmove’s premium valuation reflects its dominant position in UK online property advertising, where network effects have historically limited agent churn.
But Jefferies cautioned that Zoopla’s potential restructuring and new ownership could trigger renewed competitive pressure after several quiet years.
The analysts said much of their April analysis remains relevant but stressed that the latest news flow puts the competitive outlook back in focus.
The three most relevant changes since April are Silver Lake’s appointment of advisers to run a process, CoStar’s completion of Domain, and the re-rating of Rightmove equity in the absence of competitive news, Jefferies added.