REA Group, the property listings company majority-owned by News Corp, said on Monday it was considering buying British firm Rightmove to create a global real estate giant, in what would be Australia's biggest outbound deal of the year.

Britain's largest property portal, Rightmove had a market value of 4.36 billion pounds ($5.73 billion) as of Friday's close. It makes money from listing real estate agents on its website.

Shares of REA, in which the Murdoch family-controlled media firm News Corp owns a more than 61% interest, fell as much as 8% to A$201.5 and were set for their worst day since December 2022. The stock was last down 7.7% at A$202.16 after a trading pause earlier in the day.

"Despite the potential long-term benefits of a strategic acquisition, the takeover move suggests capital vulnerability and risks," said Junvum Kim, Saxo Asia Pacific senior sales trader at Saxo Markets.

If the deal goes through, it will be the largest so far this year where an Australian firm buys an overseas company, data from LSEG showed.

REA said it was considering a possible cash and share offer for London-listed Rightmove. It, however, said it had neither approached nor held any talks with Rightmove.

REA now has to update the market if it has a firm intention to make a bid by Sept. 30 under the UK's takeover code.

Rightmove did not respond to a request for comment.

"For this negotiation to be successful, it is essential for REA Group to clearly communicate to shareholders the potential benefits of this opportunity," said Ben Williamson, co-founder and co-CEO at trading platform InvestorHub.

"If it's a good deal, the company shouldn't let the initial response from investors determine whether or not it proceeds with the deal."

Early last month, REA reported a jump in annual earnings and raised its dividend. It said residential demand remains strong nationally and with decade-high interest rates being put on hold, positive market fundamentals and robust supply should support consumer confidence.

($1 = 0.7613 pounds)

(Reporting by Aaditya Govind Rao and Rishav Chatterjee in Bengaluru; Editing by Subhranshu Sahu)