RealTime IT News

Homestore Acquiring Move.com

Homestore.com Inc. is acquiring Cendant Corp.'s Internet real estate portal move.com in a $761 million deal that creates such a large online presence that the Justice Department will conduct an antitrust review before the closing.

Homestore.com said the acquisition will create "the largest ... marketplace for home and real estate-related products and services on the Internet."

Cendant assets to be integrated into Homestore.com's network of Web sites include move.com, apartment locator site Rent Net, direct marketing company Welcome Wagon and other sites.

Cendant was up 62 cents on the news in early trading at $10.56. Homestore.com was up $2.19, trading at $31.12.

Homestore.com's REALTOR.com site also gets exclusive 40-year access to the listings of Cendant's Century 21, Coldwell Banker and ERA real estate franchises.

Homestore.com is making the acquisition in an all-stock transaction totaling approximately 26.3 million shares; based on yesterday's closing price of $28.953 per share, the transaction is valued at approximately $761 million.

Homestore.com, which also operates HomeBuilder.com, SpringStreet.com and HomeFair.com, said the transaction is currently under review by the antitrust division of the Department of Justice.

"We've done our homework," said Stuart Wolff, Homestore.com's chairman and chief executive in a conference call with analysts. He said the company is confident the transaction will be approved.

The deal includes an agreement by Cendant to purchase Homestore.com's technology and Web-based marketing products and vertical ASP solutions.

In addition, Cendant will invest in Homestore.com's development of the Realtors Electronic Transaction Platform (eRealtor.com), the official real estate transaction platform of the National Association of Realtors.

"With this transaction, we're increasing choices for consumers nationwide while continuing to put the real estate professional center stage," Wolff said. "This is a giant step forward."

The transaction does not include National Home Connections or Metro Rent, which will be retained by Cendant. Cendant gains a seat on the Homestore.com board.

Although revenues have been climbing steadily and the company brought in $62 million in the third quarter, Homestore.com has yet to make any money, and in fact it has lost $1.03 per share over the first three quarters of this year.

"Homestore.com has done an outstanding job establishing itself as the leading Internet real estate destination, and we are very pleased to align our expanding New Economy efforts with them," said Cendant's chairman, president and chief executive officer, Henry R. Silverman.

Cendant said the deal is expected to enhance its off-line real estate businesses and franchise systems.