Currently at the level of gossip, Domain Holdings Australia Ltd (ASX:DHG) has been named as an interested party in acquiring Link Group’s 44% share of Pexa. Domain currently has a focus on property portals and technology for real estate agents and buyers and sellers of property. Other parties that have been named include private equity infrastructure funds such as Macquarie Infrastructure and Keppel Infrastructure.
The current owners of PEXA are Link, Morgan Stanley Infrastructure and The Commonwealth Bank.
A company already involved in the property market such as Domain should be able to do a lot more interesting things with Pexa as opposed to an owner that is a multi-billion dollar fund that will add it to its collection of lucrative and appreciating assets.
If this is the case, then it is conceivable that there are likely to be other interested parties coming forward amongst companies in the proptech field, that is if they can get hold of the money to make such an acquisition. How much is it going to cost a buyer? With such strong interest emerging, it’s not going to be cheap and may reach or exceed $1 billion.
It is a ‘fluid’ situation with perhaps Morgan Stanley Infrastructure and / or CBA taking the opportunity to cash-in on their holdings. In the end, it is possible that Link may not sell its stake at all. The company is a premature seller in relation to the business lifecycle of a technology company such as Pexa and it is being driven by its own cash flow and stability needs.