Rightmove rejects £6.1bn takeover move by Rupert Murdoch’s REA
25 September 2024, 08:04
The Australian suitor, which is majority-owned by the tycoon’s News Corp group, tabled its third approach on Monday.
Rightmove has rejected a £6.1 billion takeover deal from Rupert Murdoch’s REA Group.
The Australian suitor, which is majority-owned by the tycoon’s News Corp group, tabled its third approach for the London-listed online property platform business on Monday.
The deal saw it put forward a 770p-a-share proposal, having seen its initial move, valuing the company at about £5.6 billion, rejected earlier in the month.
On Wednesday, Rightmove bosses unanimously rejected the latest approach.
Rightmove said that, after considering the potential deal with financial advisers, it “concluded that the increased proposal continues to be unattractive and materially undervalues the company and its future prospects”.
The UK firm highlighted a dip in the value of REA’s own shares in recent weeks as it rebuffed the proposal.
The latest approach involved a cash component of 341p a share — up from 305p offered this month — with the remainder to be paid in REA stock.
However, Rightmove highlighted that REA’s share price on Tuesday September 24 was down by around 12% compared with the end of August, weighing on the value of any potential deal.
Rightmove said that “shareholders should take no action in respect of the increased proposal”.
REA has a deadline of September 30 to submit a formal offer to buy Rightmove or walk away from a deal, in line with UK takeover rules.
The Australian company said it was “disappointed” by the latest rejection.
It added that it “is frustrated that, save for the rejection of REA’s three previously disclosed proposals, REA has still had no substantive engagement with Rightmove”.
REA stressed that it still believes the proposal “represents a highly compelling proposition for Rightmove’s shareholders at a significant premium to relevant trading metrics, providing a combination of immediate value certainty in cash and at the same time giving Rightmove shareholders the opportunity to benefit from the future value creation of the combined business”.
Rightmove is the UK’s largest online real estate portal, while REA is Australia’s largest property website.
Founded in a garage in Melbourne in 1995, REA has expanded its operations throughout the country, while it also has businesses in India and south-east Asia.
It is valued at about 27 billion Australia dollars (£13.9 billion) on Australia’s stock market and employs around 3,400 staff.
