23rd Sep 2024 08:58
(Alliance News) - Rightmove PLC said it will respond to a sweetened REA Group Ltd takeover proposal in "due course".
The property portal, which deemed two prior offers from REA "uncertain, highly opportunistic", backed its prospects after the latest tilt from the Sydney listing.
REA, also a provider of an online property buying portal, said on Monday the new bid values Rightmove's equity at GBP6.1 billion. The offer comprises 341 pence in cash and 0.0422 of a new REA share. Based on REA's closing price on Friday, the bid values each Rightmove share at 770 pence.
Rightmove shares rose 3.0% to 694.60 pence each in London on Monday morning. REA closed 2.5% lower at AUD194.00 each in Sydney on Monday afternoon.
Rightmove Chair Andrew Fisher said: "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. Based on the implied value and structure of REA's first and second indicative non-binding proposals, we considered these proposals to be uncertain, highly opportunistic and unattractive. Accordingly, the board unanimously rejected them.
"The board will continue to act on behalf of our shareholders and respond to the most recent proposal in due course."
REA said the new bid is a 9.2% increase on the initial offer it made earlier in September. Under the terms, Rightmove shareholders will own around 20% of the combined entity. REA noted it is yet to receive any "substantive engagement" from Rightmove yet, however, save for its two prior offers being rejected.
Rupert Murdoch's News Corp owns around a 61% stake in REA.
REA earlier in September confirmed it was considering a cash and shares bid for Rightmove. A possible of 705p per share was made on September 5.
Rightmove labelled that approach "wholly opportunistic" and said it "fundamentally undervalued Rightmove and its future prospects."
REA on Monday noted it had made another cash and shares tilt on September 16, worth 749p per share.
The Sydney listing said the latest bid "represents a highly compelling proposition for Rightmove's shareholders".
Chief Executive Officer Owen Wilson said: "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. We live in a world of intensifying competition and this proposed transaction would bring together two highly complementary digital property businesses for investment and growth.
"We have increased our proposal to an implied value of 770 pence – it provides a combination of immediate value certainty in cash and at the same time gives Rightmove shareholders an increasing opportunity in core digital property and adjacencies where we have much expertise. We are genuinely disappointed at the lack of engagement by Rightmove's board and we strongly encourage the Rightmove board to engage."
By Eric Cunha, Alliance News news editor
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