Media giant News Corp (ASX:NWS) has reportedly decided not to invest further in online real estate company REA Group Ltd (ASX:REA) after being offered some of the 13.5 million shares sold by CCZ Stratton Equities on behalf of Sam White, deputy chairman of Ray White Group.
According to the Australian Financial Review, News Corp’s local arm News Ltd wanted to acquire some of the shares on offer to increase News Corp’s 60.7 per cent stake in REA Group, however News Corp execs are understood to have rejected the idea.
The paper says News Corp could have used the creep provision of takeover law to boost its stake to 63.7 per cent, costing the company around $22 million.
In 2005 News Corp made a takeover bid for REA Group but was unsuccessful, and has since used the creep provision to lift its stake in the company.
CCZ Stratton Equities placed the REA shares at an offer price of $5.75 a share with local institutions. News Corp’s profits have been increasing year on year over the past four years.