Australia’s REA sweetens takeover offer for Britain’s Rightmove to $8.1 billion

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Australia’s REA sweetens takeover offer for Britain’s Rightmove to $8.1 billion

Rightmove logo is seen displayed in this illustration taken April 10 2023.

Reuters | Dado Ruvic

*********** property listing firm REA Group has made a third pitch to buy British rival Rightmove with a new 6.1 billion pound ($8.12 billion) offer on Monday after its two previous offers were rejected.

The latest offer consists of 341 pence in cash and 0.0422 new REA shares giving Rightmove an implied value of 770 pence per share.

Shares of REA, which is 62% owned by Rupert Murdoch’s News Corp, dropped 1.52% on Monday.

Rightmove did not immediately respond to a request for comment on the new non-binding bid outside normal U.K. business hours.

The REA offer put forward on Monday is higher than the initial offer of 705 pence per share, or 5.6 billion pounds, and the second proposal of 749 pence per share. Rightmove had rejected both the offers, saying they undervalued the company.

REA said it had not had any “substantive engagement” with Rightmove, except for the rejections, and that it remained ready to engage immediately with the Rightmove board.

“We are genuinely disappointed at the lack of engagement by Rightmove’s board and we strongly encourage the Rightmove board to engage,” REA CEO Owen Wilson said in a statement.

Britain’s housing market is triple the size of Australia’s, according to analysts, and a deal would allow REA to expedite its international growth plans.

“The increased offer is clearly aimed at bringing the Rightmove board to the negotiating table,” said S&P analyst Entcho Raykovski, noting News Corp’s REA ownership would be reduced to about 49% if a deal progresses.

“…we note that REA has not declared the offer best and final, so there is scope for further increases.”

The *********** company reiterated that it would look to apply for a secondary listing in London to give it access to a wider pool of investors.

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