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What's going on?
On Friday, a US private equity firm agreed to buy UK property search company Zoopla for a stately $3 billion. Forget taking the stairs Zooplas stock jumped by over 30%!
What does this mean?
Zoopla was built in 2007 as a property search portal (not dissimilar to the USs Zillow theres something about the Zs!) competing directly against fellow UK company Rightmove. But as the years went on, new competitors took some of Zooplas customers. In recent times, the company has undertaken a few home improvements by adding tools for customers to compare personal finance options and gas and electricity prices.
Taking possession of Zoopla is Silver Lake Partners, one of the oldest and largest technology investors around it was founded in 1999 and survived the dotcom bubble of the early 2000s.
Why should I care?
For markets: Handsome riches for Zooplas shareholders.
In response to the news of the deal, Zooplas share price rose by 31% to the price at which Silver Lake has agreed to buy the company (tweet this) suggesting investors think the deal is likely to go through. Silver Lake is still waiting for Zooplas investors to sign off on the deal, but its biggest shareholder Daily Mail and General Trust (owner of the Daily Mail newspaper) is already on board (and its stock rose too by more than 1% on Friday).
The bigger picture: Acquiring European companies is all the rage.
This year, mergers and acquisitions have been hitting record levels in Europe: April recorded the highest value of deals in a single month for almost a decade. The weak pound (a result of the mid-2016 Brexit vote) makes UK products and companies cheaper to international buyers. Over the last year UK stocks have risen by 4% on average compared to US stocks, which are up by 20%. This too may help UK companies appear somewhat cheaper to investors, encouraging them to seek deals.
Originally posted as part of the Finimize daily email.
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