Shares of Rupert Murdoch-owned REA Group (AU:REA) gained over 3% as of writing after announcing a deal to acquire a 19.9% stake in digital mortgage lender Athena Home Loans. The deal was announced after its UK counterpart, Rightmove PLC (GB:RMV), rejected REA’s third takeover bid.
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REA Group, majority-owned by U.S. media giant News Corp. (NWSA), is a digital advertising company that operates Australia’s leading property and real estate platforms. Meanwhile, Athena Home Loans is a fintech company with a mission to revolutionize mortgages.
REA Group Expands Partnership with Athena Home Loans
With this deal, REA Group and Athena have expanded their partnership, which commenced in 2022. The aim was to combine Athena’s innovative home loan products with REA’s financial services brand, Mortgage Choice. Later on, in June 2023, REA introduced the Mortgage Choice Freedom suite of white-label products, created along with Athena. These products surpassed the company’s expectations by achieving $1.2 billion in settlements during FY24.
Meanwhile, the latest transaction is valued at up to $62 million and has been financed through the company’s existing cash reserves. After this acquisition, REA will secure two seats on Athena’s Board.
Overall, REA Group believes that its investment in Athena will strengthen the current partnership between both companies. Additionally, it highlights the firm’s commitment to providing Australian homebuyers with greater options and a more streamlined experience.
The transaction is contingent upon specific conditions and regulatory approval. It is expected to be finalized in up to two months.
Is REA a Good Stock to Buy?
On TipRanks, REA stock has been assigned a Moderate Buy rating based on 12 recommendations, including six Buys. The REA Group share price target of AU$209.63 is 5.45% above the current trading price.
