News Corp's Subsidiary REA Group Proposes To Buy IProperty Group For A$4.00/shr

(RTTNews) - News Corp's (NWSA, NWS) subsidiary REA Group Limited (REA.AX) announced a recommended transaction under which it proposes to acquire 100% of the share capital of iProperty Group Limited (IPP.AX) it does not already own by way of a scheme of arrangement.

As per the proposed transaction, iProperty shareholders will receive Cash Consideration of A$4.00 per share. As an alternative, iProperty shareholders will also be able to elect Mixed Consideration comprising of A$1.20 in cash and 0.7 shares in a newly formed, unlisted public company, which will own an indirect interest in iProperty.

REA will fund the acquisition primarily from new debt facilities totaling A$480 million, with the remainder from existing cash reserves.

The acquisition is expected to complete during first-quarter of calendar year 2016 and iProperty will continue to be accounted as an associate until completion. As such, it will have little impact on earnings per share in fiscal year 2016. On a pro-forma basis the acquisition will be mildly dilutive but iProperty is expected to continue to grow strongly and in line with iProperty's current revenue growth guidance.

The transaction is subject to a number of standard conditions including iProperty shareholder and court approval, no material adverse change and no prescribed occurrences.

The iProperty directors, who are not REA nominees, have recommended that iProperty shareholders vote in favour of the Scheme, subject to no superior proposal emerging and an Independent Expert giving an opinion that the Scheme is in the best interests of iProperty shareholders.