An Australian property company majority owned by Rupert Murdoch’s News Corp has said it is considering a takeover bid for Rightmove, the British property website.

REA Group said it was considering a possible cash and share offer for Rightmove, but that it has not yet had any discussions with the company, in statements to the Australian and UK stock markets on Monday.

Shares in Rightmove surged by 25% on Monday morning, making it the top riser on the FTSE 100 and giving it a market value of £5.4bn. Shares jumped as high as £6.96, their highest level since March 2022, up from £5.55 on Friday night.

Rightmove is the UK’s leading property portal market, and estate agents across Britain use the site to advertise properties for sale and rent.

However, Rightmove’s position is expected to come under pressure after American property company CoStar bought rival UK site OnTheMarket from a consortium of high street agents who had hoped to win back control of the market from Rightmove and the second biggest portal, Zoopla.

REA did not say how much it was considering offering for Rightmove, but the British company was valued at £4.4bn on Friday before the potential bid was revealed. The company said there was no certainty of making a formal offer, and it now has until 5pm on 30 September to do so under UK takeover rules or walk away.

REA was founded in 1995 in a garage in Melbourne. After floating in 1999 its value soared during the dotcom bubble before crashing. It owns a number of property websites in Australia, including realestate.com.au, property.com.au and data company Proptrack. It also has several brands in India, and realtor.com in the US. The company has previously tried to expand into the UK, but it sold that operation to Zoopla in 2009.

The Murdochs first bought a stake in 2001. Their company, News Corp, owns 61% of REA’s shares, with no other shareholder owning more than 2%, according to S&P Global Market Intelligence.

REA has risen to a stock market value of A$29bn (£15bn), more than News Corp at A$24bn. That prompted activist investor Starboard Value to put pressure on News Corp last year to sell REA to realise its value. The campaign came a month after Rupert Murdoch announced his retirement from direct leadership of his media empire.

Rightmove was founded in 2000 by four corporate estate agencies: Countrywide, Connells, Halifax and Royal and Sun Alliance. It was initially free to list properties, with charging introduced in 2002.

Rightmove listed its shares on the London Stock Exchange in 2006. Its biggest shareholders are Los Angeles investment manager Kayne Anderson Rudnick with 20% and British investment manager Lindsell Train, with 6.6%.

REA said it saw “clear similarities” with Rightmove’s “leading market positions in the core residential business, continued expansion and innovation of offerings across adjacent segments, leading audience share and strong brand awareness, as well as highly aligned cultural values”.

It said the deal would be a “highly attractive investment opportunity for both REA and Rightmove shareholders”.

Jessica Pok, an analyst at investment bank Peel Hunt, said the company had been undervalued “due to the negative sentiment on the UK housing market and concerns over competitive threats from CoStar/OnTheMarket”.

She said the company was attractive because of the stability of the core business of advertising homes, plus “growth opportunities in other revenue streams such as mortgages, commercial real estate and rental” under its chief executive, Johan Svanström.