REA raises Rightmove bid to £6.1bn as it slams ‘lack of engagement’
Australian property group REA has upped its takeover bid for Rightmove to £6.1bn, saying it is “genuinely disappointed” with the lack of engagement from the company so far.
Earlier this month, Rightmove snubbed a £5.6bn offer from Rupert Murdoch-owned REA, saying it was “wholly opportunistic” and undervalued the British property portal.
On Friday, the Rupert Murdoch-controlled Australian property group REA sweetened its proposed offer for Rightmove to £5.9bn, which Bloomberg reported the company also rejected.
This morning, however, REA said it has increased its bid by 9.2 per cent to 341p in cash, a 39 per cent premium to Rightmove’s share price on 30 August.
The improved offer to 770p per share, including 341p in cash and 0.0422 new REA shares, caused Rightmove shares to jump over four per cent at market open.
Owen Wilson, REA chief executive said: ““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.
“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.
“We are genuinely disappointed at the lack of engagement by Rightmove’s Board and we strongly encourage the Rightmove Board to engage,” Wilson added.
REA also previously revealed plans for a dual listing in the UK, which would address concerns for UK-only funds unable to hold REA shares.
Peel Hunt analyst Jessica Pok said although this should smooth the deal for investors, “we believe the offer is still not at the level investors would entertain”.
The most recent bid is still six per cent lower than the five-year pre-pandemic average and 11 per cent lower than the current European peer average, she explained, adding: “In our view, the valuation should at least start in the low 20s on EV/EBITDA to be considered.”
Rightmove said its board will “carefully consider” the increased proposal.
Chair Andrew Fisher said on Monday: “Rightmove is an exceptional company with a very clear strategy, a consistent track record of delivery and a strong management team. The Board is confident in the Company’s short and long term prospects, and sees a long runway for continued shareholder value creation.
“Based on the implied value and structure of REA’s first and second indicative non-binding proposals, we considered these proposals to be uncertain, highly opportunistic and unattractive. Accordingly, the Board unanimously rejected them.
“The Board will continue to act on behalf of our shareholders and respond to the most recent proposal in due course.”