NAR and realtor.com should have built one big ironclad portal a long time ago – by now the tail is wagging the dog:
Trulia has no comment on a report by Benzinga that it’s in talks to acquire realtor.com operator Move Inc. for $18 a share, Bloomberg reports.
But some analysts who follow Zillow, Trulia and Move think consolidation in the space is likely.
Shares of Zillow and Trulia were up this week after analysts at Canaccord Genuity upped their target price for Zillow, citing growth potential and the possibility of an eventual merger of Zillow and Trulia.
They noted that six investors who hold a 42 percent stake in Zillow also own 52 percent of Trulia, “potentially reflecting their desire to see consolidation in the vertical.”
“It’s something that would make sense,” said Zachary Prensky, managing partner of Little Bear Investments, of speculation that Trulia is interested in acquiring Move. “The question is how would they handle the relationship with NAR?”
Move operates realtor.com under the terms of an agreement with the National Association of Realtors that dates back to 1996.
Trulia could get a boatload of listings, a strong position in rentals, an entre into the moving business (through Move’s moving.com) — all from a company that’s trading at a huge value disconnect from its chief competitors, Prensky said.
“If they could figure out how to make NAR happy, Trulia could leapfrog Zillow with this deal,” Prensky said.
Another analyst, Bradley Safalow, founder and CEO of stock analysis firm PAA Research, sees the possible merger in a less rosy light.
“These are two assets which have been losing share to Zillow,” Safalow said. “Does a B player plus a C player really make it on par with the A player? My guess is that it will not.”
“I’m surprised there isn’t more of a negative response in shares of Z to this, for now it seems there’s nothing that makes that stock go down,” Safalow added.
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