A £5.6 billion takeover bid has been rejected by UK online property portal Rightmove.
Rightmove said the cash-and-shares offer from Australian property firm REA Group, backed by Rupert Murdoch’s News Corp, was “wholly opportunistic and fundamentally undervalued Rightmove and its future prospects”.
The proposal valued each Rightmove share at 705 pence – 305p and 0.0381 new REA shares – a premium of 26% to the Rightmove share price as of 30th August 2024, the last business day prior to the date of REA’s possible offer announcement.
It represented an enterprise value multiple of approximately 20.5x to Rightmove’s EBITDA for the 12 months ended 30th June 2024 (£272 million).
Under the terms of the proposal, Rightmove shareholders would have held approximately 18.6% 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.
“This would provide the opportunity for a wider pool of investors to gain exposure to a global and diversified digital property company on the London Stock Exchange,” it stated.
REA would need to raise equity funding to complete any successful deal for Rightmove.