RIGHTMOVE has “unanimously rejected” a fourth offer from Australia’s Rea Group, less than a week after the UK’s largest online property portal rebuffed a third bid from the digital property group controlled by News Corp.
Rea increased its cash and shares proposal to value the London-listed company at about £6.2 billion, or 781p per share. At the beginning of September, Rea proposed a bid of 705p per share, valuing Rightmove at £5.6bn, followed by subsequent bids of £5.9bn and £6.1bn.
Rightmove said in a statement: “The board of Rightmove has fully reviewed the latest proposal with its financial and legal advisers. The board has taken into consideration the views of its shareholders and also considered the representations from the chair and management team of Rea.”
'Rightmove is an exceptional company with a clear strategy'
It said the board has concluded that the latest proposal “remains unattractive and continues to materially undervalue Rightmove and its future prospects”, adding: “The board cannot recommend the latest proposal to Rightmove shareholders. Accordingly, the board has unanimously rejected the latest proposal.”
The firm rejection came ahead of yesterday’s 5pm “put up or shut up” deadline to make a firm offer or walk away.
Andrew Fisher, Rightmove’s chair, added yesterday: “We respect Rea and the success they have achieved in their domestic market. However, we remain confident in the standalone future of Rightmove. Rightmove has been the leading operator in the UK for over 20 years and it has differentiated market presence, branding and technology, and very significant opportunities for future growth.
“The last few weeks have been very disruptive, as well as unsettling for our colleagues. To the extent Rea wants to put forward a further proposal, I urge them to submit a best and final proposal ahead of today’s 5pm ‘put up or shut up’ deadline, such that we can bring certainty to this process.
“Our world-class team is executing against our strategic plan and continuing to drive innovation and accelerate growth to deliver compelling shareholder value.”
Will Australian group get Rightmove at third time of asking?
The Australian property giant, which says it operates Australia’s “leading residential and commercial property websites – realestate.com.au and realcommercial.com.au – reiterated its “disappointment and surprise at the repeated rejections of its prior proposals by the board of directors of Rightmove”.
It said it was in the interests of Rightmove’s shareholders “to engage in constructive discussions with Rea to work towards a recommended transaction”.
Rea added there had been no “substantive engagement” from Rightmove beyond “cursory procedural telephone calls” with Rightmove’s chair Andrew Fisher.
Owen Wilson, chief executive of Rea, said: “We continue to see the potential for us to strengthen Rightmove and accelerate its growth. This is a compelling opportunity to create a true global technology leader on the London market via a secondary listing, operating in two of the most attractive markets in the world.”
He added: “While the Rightmove board has refused to meet with us, we have enjoyed the opportunity to connect with Rightmove shareholders and to share our vision for the combination of the number one digital property businesses in the UK and Australia.
“We continue to see the potential for us to strengthen Rightmove and accelerate its growth.”
Rightmove knocks back third takeover offer from down under
Rupert Murdoch’s son Lachlan bought Rea in 2001, and the property company has taken on increasing importance following the sale of some of News Corp’s major media assets and the retirement of Rupert Murdoch last year.
Rea is now worth some £13.3bn and News Corp’s overall digital real-estate services division, which includes operations in the US, accounted for one-third of total global profits in the year to the end of June.
Rightmove, which acts as a “shop window” for estate agents to list properties for sale, has dominated the buying and selling market in the UK and challenged the traditional high street estate agency model in recent years. The UK’s housing market is approximately triple the size of Australia’s, meaning a deal would substantially expedite Rea’s international growth plans.
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