30th Sep 2024 10:28
(Alliance News) - Rightmove PLC on Monday rejected a sweetened takeover approach from Australia's REA Group Ltd and turned down a request to extend the bid deadline.
The Milton-Keynes based online property portal said the decision had been reached after taking soundings from shareholders and considering representations from REA management.
In a statement, Rightmove said it has concluded the latest proposal "remains unattractive and continues to materially undervalue Rightmove and its future prospects".
As a result, Rightmove said it cannot recommend the proposal to shareholders.
Rightmove said shareholder interests would be better served through the execution of Rightmove's standalone strategic plan, with the "multiple paths for long-term value creation" outlined at the Capital Markets Day in November 2023.
Responding to REA's frustrations over a lack of engagement, Rightmove said it "has taken every phone call that REA has made since its interest was first made public, with a level of engagement which in Rightmove's view is customary and appropriate".
The UK-listed firm put this in the context of an unsolicited and unilateral series of approaches.
Rightmove said Chair Andrew Fisher met with counterpart at REA, Hamish McLennan. In addition, at REA's request, there was a further meeting including members of the executive teams of both companies.
"No information was presented in either meeting which was materially new or different to the information which has been previously presented publicly by REA," Rightmove said.
Rightmove said it had declined a request for access to due diligence information and considers the information in the public domain to be sufficient for REA to put forward a proposal capable of recommendation.
"Without a compelling proposal, it would not be appropriate or in the best interests of Rightmove or its shareholders to provide confidential and commercially sensitive information to REA," Rightmove explained.
Fisher said: "We respect REA and the success they have achieved in their domestic market. However, we remain confident in the standalone future of Rightmove."
Fisher said the the last few weeks have been "very disruptive", and "unsettling".
He called on REA to put forward a further proposal, if it wants, ahead of today Monday's 5pm deadline "such that we can bring certainty to this process".
Rightmove declined a request from REA for the put-up-or-shut-up deadline to be extended.
Shares in Rightmove fell 2.9% to 649.20 pence each in London on Monday. The wider FTSE 100 was down 0.6%. Shares in REA, majority owned by Rupert Murdoch's News Corp, closed 0.5% higher at AUD201.00 each in Sydney on Monday.
On Friday, Melbourne, Australia-based REA issued its fourth acquisition proposal to Rightmove.
It follows offers previously rejected earlier in September that initially valued Rightmove at GBP5.6 billion before REA upped its offer to GBP6.1 billion.
The terms of the fourth proposal outline that Rightmove shareholders would receive for each share owned, 346 pence in cash and 0.0417 of a new REA share. This would be supplemented by a 6p per share special dividend meaning the fresh offer values individual Rightmove shares at 781p each, implying a total company value of GBP6.2 billion.
"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," said REA's Chief Executive Officer Owen Wilson at the time.
By Jeremy Cutler, Alliance News reporter
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