Rightmove rejects third REA bid after Australian agency’s shares stoop

Rightmove has rejected a £6.1billion takeover bid from REA Group following a sharp decline in the value of the latter firm’s shares. 

The FTSE 100 group told investors on Wednesday the third consecutive unsolicited cash and share bid, which implied a value of 770p per Rightmove share, ‘continues to be unattractive and materially undervalues the company and its prospects’.

Rightmove highlighted a 12 per cent slump in REA Group shares since its first offer was made public, meaning the share portion of the offer is worth less, as the British firm’s board unanimously rejected the bid.

Rightmove holds its nerve: UK property portal rejects third bid made by Australia’s REA 

REA, which is 61 per cent owned by the Murdoch family’s News Corp, says a takeover of Rightmove ‘would look to enhance the UK property experience for buyers, sellers and renters’, supporting Rightmove’s vision ‘to give everyone the belief they can make their move’.

The Australian property listings website’s most recent bid, which follows previously rejected offers of 705p and 749p per share, is at a 12.7 per cent premium to Rightmove’s closing share price on Tuesday of 683p.

Rightmove shares have rocketed roughly 23 per cent since the start of September when the first REA bid was made.

But Rightmove said on Wednesday: ‘The board… [has] concluded that the increased proposal continues to be unattractive and materially undervalues the company and its future prospects.

‘Accordingly, the board unanimously rejected the increased proposal on 24 September 2024.’

Under City rules, REA now has until 5pm on 30 September to announce a firm intention to make an offer for Rightmove or walk away.

REA on Wednesday indicated it remains in the race to acquire the British firm, despite having had ‘no substantive engagement with Rightmove’.

The group said: ‘REA continues to firmly believe that the further improved proposal represents a highly compelling proposition for Rightmove’s shareholders at a significant premium to relevant trading metrics, providing a combination of immediate value certainty in cash and at the same time giving Rightmove shareholders the opportunity to benefit from the future value creation of the combined business.

‘REA urges Rightmove shareholders to encourage the board of directors of Rightmove to engage in constructive discussions with REA to work towards a recommended transaction, ahead of the upcoming [30 September] deadline.’