11th Sep 2024 09:32
(Alliance News) - Rightmove PLC and REA Group Ltd on Wednesday confirmed that Rightmove rejected a takeover proposal from REA that it said "wholly undervalued" the company.
Milton Keynes, England-based Rightmove and Melbourne, Australia-based REA Group both provide online property buying portals.
REA on Monday last week, in response to "press speculation", confirmed it was considering a cash and share takeover offer for its UK peer. It claimed it sees a "transformational opportunity" in the potential combination.
On Wednesday, however, REA and Rightmove confirmed that the latter had rejected REA's "unsolicited, non-binding and highly conditional" proposal to acquire its entire share capital.
Had Rightmove accepted the proposal and subsequently a firm offer, its shareholders would be entitled to 305 pence in cash, plus 0.0381 of a new REA share, for each Rightmove share.
REA said the proposal implies a total offer value of 705p per Rightmove share and values the entire share capital at around GBP5.6 billion, although Rightmove said it implies an offer value of 698p. Rightmove shareholders would be left with approximately 18.6% of the combined firm's issued share capital.
Shares in Rightmove were trading 0.7% higher at 675.40p on Wednesday morning in London for a GBP5.33 billion market capitalisation.
REA shares on Tuesday closed down 2.2% at AUD197.99 in Sydney for a AUD26.16 billion, about GBP13.32 billion, market cap.
REA also said Rightmove shareholders would remain entitled to receive the British firm's planned 2024 interim dividend of 3.7p per share.
Confirming that it had "carefully considered" and on Tuesday rejected the proposal, however, Rightmove called REA's approach "wholly opportunistic" and said it "fundamentally undervalued Rightmove and its future prospects".
REA must announce by the evening of September 30 either its firm intention to make an offer or its lack of such an intention.
By Emma Curzon, Alliance News reporter
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