Australian property giant REA Group has urged shareholders in Rightmove plc to take action after seeing a third bid of £6.1 billion rejected by the latter’s board.
Earlier this month, the UK online property portal rejected a cash-and-shares offer from REA Group – backed by Rupert Murdoch’s News Corp – labelling it as “wholly opportunistic” and claiming it “fundamentally undervalued Rightmove and its future prospects”.
A second proposal upped the offer from 705 pence per share to 749p and was also rejected, with the board ‘continuing to characterise it as fundamentally undervaluing Rightmove’. Its latest offer, for 770p per share, has now also been knocked back.
The offer represented a premium of 39% to the Rightmove share price as of 30th August 2024, the last business day prior to the date of REA’s possible offer announcement. Rightmove shareholders would have held approximately 20% of the combined group’s issued share capital following completion of the proposed transaction.
“REA is disappointed by the latest rejection from the board of directors of Rightmove and is frustrated that, save for the rejection of REA’s three previously disclosed proposals, REA has still had no substantive engagement with Rightmove,” read a notice to the London Stock Exchange.
“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.
“REA urges Rightmove shareholders to encourage the board of directors of Rightmove to engage in constructive discussions with REA to work towards a recommended transaction, ahead of the upcoming deadline… on 30th September 2024.
“REA remains ready to engage immediately with the board of directors of Rightmove.”
In rejecting the bid, Rightmove stated: “The board… concluded that the increased proposal continues to be unattractive and materially undervalues the company and its future prospects.
“Rightmove shareholders should take no action in respect of the increased proposal.”
REA Group operates websites Down Under including realestate.com, as well as brands in India, other Asian markets and US site realtor.com. It would need to raise equity funding to complete any successful deal for Rightmove.