Secret buyer for Propertyfinder – but deal is uncertain

The future of Propertyfinder, the UK’s oldest property portal, hangs in the balance after a statement to the Australian Stock Exchange.

This said that Propertyfinder’s joint owners, the Australian property organisation REA Group and News International, have entered into a non-binding heads of agreement for the potential sale of all or part of the website.

But the statement stressed that the process was subject to due diligence and strongly suggested the deal might not come off.

The statement said: “Even if this transaction successfully proceeds to completion, it is unlikely to have any impact on the guidance provided by REA Group Ltd in its ASX announcement of May 28, 2009.”

This earlier announcement referred to a reduction in profits for REA’s businesses in Hong Kong and UEA.

The latest statement to the Australian Stock Exchange was by Georg Chmiel, chief finance officer of REA.

It did not give any hints as to the identity of the potential purchaser but it is understand that it is not the management buyout team led by Propertyfinder’s current chief executive Gillian Kent, and Nick Leeming, the portal’s original founder.
 
It is also understood that Propertyfinder had been pitched as a possible acquisition to the portal’s main UK competitors, including Rightmove, before the May 28 announcement which revealed that the owners of Propertyfinder were considering its future. It is believed that at that stage, the other portals were not interested.

While there are thought to have been three bids for Propertyfinder, including that of the management team, the identity of the successful bidder may not be known for another week or so.

If Propertyfinder does sell to the mystery buyer, it will be interesting to see the price they end up paying.

In 2005, REA and News International bought Propertyfinder for about £13m. However, despite having good market share and a loyal base of around 5,500 estate agent subscribers, Propertyfinder has made heavy losses, estimated at £5m a year, with revenues estimated at £7m a year but costs running at £12m.

News International also appears to have become disenchanted with Propertyfinder, in favour of the free search engine Globrix, which now powers property searches for the likes of The Times. If other newspaper groups – the Guardian, Mirror and Mail – have also become less enamoured of their property portals, it suggests there are interesting times ahead.

Meanwhile, there is also the suggestion that the new buyer may not want the whole of the Propertyfinder business. It is also understood that closure, with redundancies for staff, may still be on the cards.

No one at Propertyfinder wished to comment.