REA Group, backed by Rupert Murdoch, has submitted a third bid for Rightmove after prior rejections by shareholders.
- The new offer, consisting of cash and shares, values Rightmove at £6.1 billion, reflecting a 9.2% premium.
- REA is focused on merging their expertise with Rightmove’s business, amid Rightmove board’s non-engagement.
- Rightmove shares responded positively, rising 2.7% upon the announcement of the new bid.
- The board of Rightmove remains sceptical, citing previous offers as opportunistic and unattractive.
Rupert Murdoch’s REA Group, a well-established Australian property firm, has intensified its efforts to acquire Rightmove by presenting a third bid, following the rejection of its two preceding offers by Rightmove’s shareholders. The latest proposal from REA includes a payment of 341 pence in cash per share, supplemented by 0.0422 new REA shares, positioning the total value at 770 pence per Rightmove share, and valuing the company at an impressive £6.1 billion. This represents an attractive 9.2% increase over their earlier bid, a move demonstrating REA’s strategic commitment to securing the acquisition.
REA’s leadership, spearheaded by CEO Owen Wilson, has articulated the rationale behind this increased offer. Wilson expressed confidence in the potential synergies between REA’s advanced technological capabilities and Rightmove’s established market presence. According to Wilson, “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.” This statement underscores REA’s determination to persuade Rightmove’s board of the potential benefits inherent in this acquisition.
In the wake of the new bid, Rightmove’s share price appreciated by 2.7%, reaching 692 pence as the London market commenced trading. This market reaction could suggest investor optimism regarding the possibility of a deal. Nevertheless, Rightmove’s board has maintained a cautious stance, affirming that they would deliberate on REA’s latest offer ‘in due course’.
Andrew Fisher, the Chair of Rightmove, has made it clear that the board remains firm on its prior assessments of REA’s approaches. Fisher stated, “Rightmove is an exceptional company with a very clear strategy, a consistent track record of delivery and a strong management team.” He further described the initial offers from REA as “uncertain, highly opportunistic, and unattractive,” decisions which were reached unanimously by the board. These remarks reflect a cautious leadership wary of undervaluing their company’s prospects.
Financially, Rightmove continues to showcase robust figures, with a revenue report of £192 million for the first half of the year. This performance, marking a 7% improvement compared to the previous year, was complemented by a slight uptick in pre-tax profits to £133 million. This indicates a promising trajectory for the company irrespective of acquisition talks.
REA Group’s third bid for Rightmove underscores an ongoing strategic battle with significant financial implications.
