News Corp. to Buy Owner of Realtor.com for $950 Million

News Corp., the newspaper publisher controlled by Rupert Murdoch, agreed to buy the owner of Realtor.com for $950 million, expanding its digital real-estate listings to compete with sites such as Zillow.com.

Shareholders of the U.S. online real-estate business Move Inc. will get $21 a share in cash, New York-based News Corp. said yesterday in a statement. That’s 37 percent more than Move’s closing price on Sept. 29, and the total purchase price is net of the target’s cash, the company said.

Adding websites such as Realtor.com and Moving.com will allow News Corp. to expand in real-estate listings as advertising revenue sputters. The publisher, completing its first full year as a stand-alone company, in August reported quarterly earnings that missed analysts’ estimates as it struggled in its transition from print to digital.

With a major marketing push from News Corp.’s Wall Street Journal and other digital assets, Move could become the largest U.S. online real estate seller, said Chief Executive Officer Robert Thomson.

“We believe Move is in a unique position to be the major player and expect its growth to be turbo-charged by News Corp. given our powerful content platforms in the U.S.,” Thomson said on a conference call yesterday. “There is an enormous opportunity for value creation in the U.S. given the early stages of the shift to online advertising in real estate and the overall size of the market.”

Zillow, Trulia

Companies likes Zillow Inc., owner of the namesake listing site, have expanded as more people move their home searches online. The Seattle-based company in July said it would acquire rival Trulia Inc. in a transaction that would make the combined company the largest in online real estate advertising. Move can distinguish itself from these firms by focusing on its relationship with realtors, Thomson said.

“Our strategy is quite different to that of Trulia and Zillow,” Thomson said. “We see tangible and enduring value in the role of realtors.”

The deal is News Corp.’s largest since it split from 21st Century Fox Inc. in June 2013. In May, News Corp. agreed to buy Harlequin Enterprises for $415 million, bolstering its book publishing business with the romance imprint.

News Corp. plans to hold 80 percent of Move, with Australia’s REA Group Ltd., which is 61.6 percent owned by News Corp., owning the rest.

There are tax advantages to News Corp. and REA completing the buyout together, Bedi Singh, News Corp.’s chief financial officer, said on the conference call. The deal is expected to close in 10 business days.

Revenue Boost

The purchase of Move will boost the company’s revenue from digital real-estate services by more than 50 percent.

Move reported $29 million in adjusted earnings before interest, taxes, depreciation and amortization on revenue of $227 million for 2013. News Corp.’s digital real estate services -- made of the stake in REA Group -- reported $214 million of Ebitda on $408 million of revenue for the fiscal year ended June 30, according to a regulatory filing.

Move shares rose 37 percent to $20.96 at the close in New York yesterday. The stock had lost 4.4 percent this year through Sept. 29.

News Corp. fell 2.7 percent to $16.35, the biggest drop since May, reducing the company’s market value to about $9.4 billion. The publisher had about $3.1 billion of cash and equivalents as of Sept. 30.