Australian property giant REA Group has improved its takeover offer for Rightmove to £6.1 billion after a second bid was rejected.
REA Group CEO Owen Wilson said it was “genuinely disappointed at the lack of engagement by Rightmove’s board” as it again upped its offer for the UK online property portal from the original £5.6 billion.
Earlier this month, Rightmove 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”.
The second proposal upped the offer from 705 pence per share to 749p and was rejected, with the board ‘continuing to characterise it as fundamentally undervaluing Rightmove’.
Its latest offer, made yesterday, is for 770p per share.
It represents 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 hold approximately 20% of the combined group’s issued share capital following completion of the proposed transaction.
REA Group operates websites Down Under including realestate.com, as well as brands in India, other Asian markets and US site realtor.com. It is listed on the Australian Stock Exchange and now intends to apply for a secondary listing in London.
REA would need to raise equity funding to complete any successful deal for Rightmove.
“We believe that the combination of our world-leading expertise and technology with the attractive Rightmove business will create an enhanced experience for agents, buyers and sellers of property,” said Wilson.
“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.
“We have today increased our proposal to an implied value of 770 pence – it provides a combination of immediate value certainty in cash and at the same time gives Rightmove shareholders an increasing opportunity in core digital property and adjacencies where we have much expertise.”
His company pointed out that Rightmove’s share price has lacked any sustained upward momentum for two years.