Australian property giant REA, backed by Rupert Murdoch, makes a third bid for Rightmove.
- The offer includes 341 pence in cash and 0.0422 REA shares per Rightmove share.
- This new bid values Rightmove at £6.1 billion, a 9.2% increase from the last offer.
- Rightmove’s board is yet to respond after rejecting previous proposals.
- REA’s CEO urges engagement, citing benefits from merging both companies.
In a strategic move to secure Rightmove, REA Group, a significant player in the property sector and predominantly owned by Rupert Murdoch’s News Corp Australia, has placed a third offer on the table. This proposal encompasses 341 pence in cash per share, coupled with 0.0422 new REA shares for each Rightmove share, cumulatively valuing the company at approximately £6.1 billion. This reflects a substantial 9.2% premium over their preceding offer made earlier this month.
REA’s CEO, Owen Wilson, underscored the potential synergies of merging with Rightmove, stating that the combination of REA’s advanced technology and market expertise with Rightmove’s established presence would enhance the property transaction experience for all parties involved. Wilson expressed his disappointment with Rightmove’s board’s lack of engagement in the process, urging them to reconsider for the benefit of the industry’s stakeholders.
The market responded to this development as Rightmove shares saw an uptick of 2.7%, reaching 692 pence post-announcement. Despite this increase, Rightmove’s board has delayed their response to the latest offer, reflecting on their previous stance where Chair Andrew Fisher highlighted the company’s robust strategy, proven track record, and potential future value creation as reasons for rejecting earlier bids.
Fisher’s assertion of Rightmove’s strength was bolstered by the firm’s financial performance, with reports indicating revenues of £192 million for the initial half of the year, marking a 7% growth from the previous year, and a slight increase in pre-tax profits to £133 million. The board had described REA’s prior non-binding offers as uncertain and unappealing, citing insufficient engagement and strategic alignment.
The ultimate decision from the Rightmove board regarding this bid remains awaited, with observers keenly watching for any potential shifts in their position or strategy.
The fate of this high-stakes deal now hinges on Rightmove’s board, as stakeholders await their official response.
