UK’s Rightmove rejects $8.1 bln sweetened bid from Australia’s REA Group

Industry:    1 month ago

British real estate portal Rightmove on Wednesday rejected a sweetened $8.1 billion takeover proposal from Rupert Murdoch-owned Australian property listing firm REA Group, saying the increased bid was still “unattractive”.

“The board considered the increased proposal … and concluded that the increased proposal continues to be unattractive and materially undervalues the company and its future prospects,” Rightmove said in a statement.

The latest proposal from REA Group, which is 62% owned by Murdoch’s News Corp, consists of 341 pence in cash and 0.0422 new REA shares for each Rightmove share, giving Rightmove an implied value of 759 pence per share.

The proposal, disclosed by REA earlier this week, came after an initial offer of 705 pence per share and a second one of 749 pence per share were rejected by Rightmove.

Panmure Liberum analysts said in a note that the brokerage continued to see a “low likelihood” of a deal going through, citing valuation concerns against the backdrop of Rightmove’s high growth potential and the complex structure of the proposal.

Shares in FTSE 100-listed Rightmove were down 1.1% at 675.8 pence at 0938 GMT.

REA said in a separate statement it was disappointed by the latest rejection and that it had had no substantive engagement with Rightmove, other than the rejection of its proposals.

“REA remains ready to engage immediately with the board of Directors of Rightmove,” the Australian firm said.

Rightmove is a runaway market leader in Britain, but has been battling fears of increased competition over the past year or so from OnTheMarket, a rival that was bought by American property firm CoStar in 2023.

Britain’s housing market is triple the size of Australia’s, according to analysts, and the deal would allow REA to expedite its international growth plans.

REA has until Sept. 30 to make a formal offer for Rightmove or walk away.

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