Rupert Murdoch’s backed REA has intensified its bid for Rightmove, marking its third attempt at acquisition.
- REA submitted a new bid consisting of 341 pence in cash per share, along with 0.0422 REA shares.
- The new proposal values Rightmove at £6.1 billion, offering a 9.2% premium over previous offers.
- REA’s CEO criticized Rightmove’s board for lack of engagement, urging reconsideration.
- Rightmove’s board remains cautious, citing uncertainty in REA’s previous bids.
Rupert Murdoch-supported REA Group has stepped up its efforts to acquire Rightmove, submitting a third proposal to enhance its takeover approach. The Australian property company, majority-owned by Murdoch’s News Corp Australia, has placed an offer to Rightmove shareholders, which represents a significant development in its strategy to expand its digital property market footprint.
REA’s latest bid includes an offer of 341 pence in cash per Rightmove share, coupled with the issuance of 0.0422 new REA shares, implying a comprehensive offer value of 770 pence per share. This valuation escalates Rightmove’s worth to approximately £6.1 billion. Notably, the offer conveys a 9.2% increase compared to the previous bid proposed earlier this month, showcasing REA’s determination to secure the acquisition.
Owen Wilson, the CEO of REA, articulated the company’s vision by stating that merging their expertise with Rightmove’s established business would generate a superior experience for property agents, buyers, and sellers alike. He noted, “We live in a world of intensifying competition and this proposed transaction would bring together two highly complementary digital property businesses for investment and growth.” Wilson expressed disappointment over the lack of proactive engagement from Rightmove’s board, urging them to reconsider their stance for the benefit of stakeholders.
Opening at 692p, Rightmove shares witnessed a rise of 2.7% upon the news of REA’s new offer. Despite this positive market reaction, Rightmove’s board, led by Chair Andrew Fisher, remains firm, as they have stated their intention to respond to this bid ‘in due course.’ Fisher emphasized Rightmove’s strong strategic direction and management, as well as its potential for providing sustained value to shareholders. Fisher further conveyed the board’s past rejection of REA’s initial offers due to their perceived opportunistic nature, lacking in appeal and certainty.
Rightmove maintains its robust financial performance, reporting revenues of £192 million for the first half of the year, reflecting a 7% increase from the previous year. The company’s pre-tax profits have also showed a modest rise, underscoring its financial stability and appeal. This performance underpins the board’s confidence in Rightmove’s continued potential growth, reinforcing their cautious approach toward REA’s overture.
The outcome of REA’s intensified bid hinges on Rightmove’s strategic response, shaping the future of both companies.
