Zillow in talks to buy rival real-estate website Trulia: Source
(Reuters) - U.S. real estate website operator Zillow Inc Z.O is in advanced talks to buy smaller rival Trulia Inc TRLA.N, according to people familiar with the matter.
The companies, with the two property sites most visited by American consumers, are working on a deal that could be finalized in a matter of weeks, the people said on Thursday, asking not to be named because the discussions are private.
Trulia shares jumped as much as 40.5 percent to $57 on Thursday, valuing the company at $2.10 billion, after Bloomberg News reported Zillow may reach a deal to buy the company as soon as next week. The stock ended up 32 percent at $53.74 on the New York Stock Exchange. (bloom.bg/1qCMgeD)
Zillow shares closed up 15.3 percent at $145.76, giving it a market capitalization of roughly $5.8 billion. The proposed acquisition would allow the company to corner a larger share of online spending on real estate listings and advertising.
Zillow and Trulia declined to comment on Thursday.
A deal would improve Zillow's pricing power and give it access to Trulia's software to compete against Move Inc MOVE.O, said Telsey Advisory Group analyst James Cakmak, who covers both Zillow and Trulia.
The companies, which list properties for sale or rent on behalf of homeowners and agents, get revenue through subscriptions from real estate agents and by selling advertising.
"There are three players in the market going after the same dollars and I don't think you need three players," Cakmak said.
Zillow recently bought Retsly Software Inc and also partnered with RealPage Inc RP.N to allow Zillow customers to market their properties on RealPage's rental site.