An Australian property company, REA, backed by Rupert Murdoch, intensifies its efforts to acquire Rightmove with a new bid.
- The third offer from REA, set at 770 pence per Rightmove share, signifies a 9.2% premium over its prior offer.
- REA’s CEO Owen Wilson emphasises the potential synergies between the two companies and urges Rightmove’s board to engage.
- Rightmove shares experience a 2.7% increase following the announcement of the bid, reflecting market interest.
- The Rightmove board remains cautious, having previously rejected two offers, citing confidence in the company’s prospects.
REA, an Australian property company backed by billionaire Rupert Murdoch, has made a strategic third offer to acquire Rightmove. This latest bid, unveiled on Monday, offers a comprehensive package of 341 pence in cash per share along with 0.0422 new REA shares. The implied total offer of 770 pence per Rightmove share values the company at a substantial £6.1 billion, marking a 9.2% premium compared to the previous proposal.
Owen Wilson, the CEO of REA, expressed the company’s vision, stating: “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.” Wilson further articulated the company’s disappointment regarding the lack of engagement by Rightmove’s board and strongly encouraged them to participate in discussions.
In response to this development, Rightmove’s stock saw an uptick of 2.7%, climbing to 692 pence during the morning trading session in London. This movement indicates a positive initial market reaction to REA’s new bid, showcasing investor interest in the potential acquisition.
Despite the market’s enthusiasm, Rightmove’s board has taken a cautious stance. Chairman Andrew Fisher acknowledged the company’s robust strategy and consistent performance, reinforcing the board’s unanimous rejection of prior offers due to their perceived opportunistic nature. Fisher stated, “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.”
Rightmove has reported increasing revenues of £192 million for the first half of the year, reflecting a 7% rise from the previous year, with pre-tax profits modestly rising to £133 million. This financial performance underpins the board’s confidence in the company’s future trajectory and justifies their cautious approach towards engagement with REA’s revised bids.
REA’s third bid for Rightmove intensifies the strategic acquisition drive, yet the outcome remains contingent on further board engagement.
