There were fresh signs of faltering confidence in the housing market in UK today after Halifax Bank of Scotland sold its 13% stake in property website Rightmove.
HBOS – the group’s second biggest shareholder – gained £59.2m (€74.5m) from the sale of its 16.2 million shares at 364p, nearly 10p below Rightmove’s market price.
Shares in the website – which closed at 385p last night – were down more than 3% after the stock was sold on the market today.
The HBOS stake was worth £89m (€112m) more three months ago, but Rightmove’s shares have fallen from a high point of 551.5p in February as the housing market cools. The company is now trading at close to levels seen at its flotation in March 2006.
Panmure Gordon analyst Alex DeGroote said: “At this stage in the housing market/property cycle, it is hard to interpret this as a vote of confidence.”
HBOS was one of the four founder companies of Rightmove along with insurer Royal & Sun Alliance, Countrywide and Connells. Only Connells now remains as an investor.
A spokesman said the sale was a “strategic” decision following reductions of its stake last year, and added that it would maintain a close commercial relationship with Rightmove.
HBOS announced plans last month to call on shareholders for £4bn (€5bn) in cash as it looks to strengthen its balance sheet.
In a gloomy trading update earlier this month, Rightmove warned that increasing numbers of estate agents were closing branches as the slower market took its toll.
The firm said its retention rate for estate agents – the proportion who keep using the website to advertise properties – had slipped to 85% this year, compared to 92% in 2007.
Despite winning market share from regional newspapers, Rightmove warned that the number of agent closures would increase and said the average time that new home developments were staying on the website was lengthening.
But Mr DeGroote added that the stake sale could increase the chances of a takeover of the firm.
“Leaving aside the ongoing issues in UK housing the company remains a solid asset play for the long-term based on its number one market share in UK property classifieds,” he said.