SPAC mania could reach REA Group

News Corp-backed REA Group’s investments in Asia have been a textbook waste of money so far, but it may get some small consolation if Morgan Stanley is on the money.

The bank’s analysts reckon another investment craze sweeping markets could help lift the value of the iProperty Asian assets REA group recently swapped for a 16.3 per cent stake in Singapore-based property portal PropertyGuru. 

Morgan Stanley suggests PropertyGuru could merge with a Peter Thiel-backed SPAC (special purpose acquisition company) named Bridgetown 2 Holdings. Which would be a welcome change of fortunes for the digital classifieds business, given it’s written off $356 million of the iProperty acquisition valued at $751 million.

For the uninitiated, SPACs are a new investment mania symptomatic of central banks’ zero interest rate policy in the same way as bitcoin, dogecoin, meme-stocks, non-fungible tokens (NFTs), and local property prices.

A mooted deal for Thiel’s SPAC to acquire PropertyGuru for $2.7 billion could value REA Group’s 16.3 cent stake much higher than Morgan Stanley and most analysts currently do, the broker said. Giving REA another potential benefit from our zero-rate world.