Rightmove, the British real estate portal, rejected an enhanced USD 8.29 billion takeover bid from REA Group, Rupert Murdoch's Australian property firm. Despite this being REA's fourth offer, Rightmove's board deemed it undervalued the company, refusing both the proposal and due diligence access. REA's revised bid valued Rightmove at 781 pence per share, a 3% improvement over its previous offer. Rightmove, confident in its standalone strategy, believes shareholder interests are better served independently. REA has until 1600 GMT to submit a formal offer. Rightmove remains a dominant player in the UK housing market despite rising competition from rivals.
Earlier this month, Rightmove, the British real estate portal, rejected an enhanced USD 8.29 billion takeover offer from Rupert Murdoch's Australian property listing firm, REA Group. Despite the offer being the fourth bid from REA, Rightmove's board concluded that it continued to undervalue the company. After consulting with shareholders and considering the representations made by REA's chair and management team, Rightmove found the proposal submitted on Friday to be "unattractive."
Rightmove also refused to grant REA Group access to conduct due diligence, stating that it believed the best interests of its shareholders would be served through the continued execution of its independent strategic plan. The decision comes after REA Group, which is 62% owned by Murdoch's News Corp, put forward a revised bid that valued Rightmove at 781 pence per share. This offer included 346 pence in cash, 0.0417 new REA shares, and a special cash dividend of 6 pence per share. The revised bid represented a 3% improvement over the company's previous offer.
Despite the sweetened offer, Rightmove remained resolute in its decision to reject it. In early trading on Monday, shares of the FTSE 100-listed company dropped by approximately 4%, reaching 642 pence. REA Group faces a deadline of 1600 GMT on Monday to either submit a formal offer for Rightmove or withdraw from the deal. REA had requested an extension from the UK's takeover regulator to allow for further consideration of a potential fifth offer.
Throughout the negotiation process, REA had expressed frustration at Rightmove's repeated refusal to engage in talks, making it clear that the Australian company was keen to secure a deal. However, Rightmove's Chair, Andrew Fisher, held discussions with REA's Chair, Hamish McLennan, while executive teams from both companies also engaged in discussions.
Rightmove has remained steadfast, despite pressure from its suitor, and has indicated that its long-term plan is preferable to accepting REA's terms. Meanwhile, REA's persistent attempts to acquire Rightmove highlight its strategic interest in expanding within the UK market, which Rightmove currently dominates.
Rightmove, a player in the UK property search market, has faced some competitive pressure in recent years, particularly following the acquisition of rival OnTheMarket by American property firm CoStar in 2023. However, Rightmove is positioned for recovery as market sentiment in the UK housing sector improves, aided by the prospect of more interest rate cuts.
In rejecting the latest offer, Rightmove signals its confidence in its ability to navigate the challenges ahead independently and to deliver value to its shareholders without the involvement of REA Group.
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