Australian real estate listing provider REA Group Ltd. presented a £5.6 billion (€6.6 billion) takeover proposal for Rightmove that was rejected by the UK’s biggest property portal by market value.
REA, part of media mogul Rupert Murdoch’s empire, made a preliminary cash-and-stock proposal valued at 705 pence per share, according to a statement confirming.
Rightmove shareholders would receive 305 pence in cash and 0.0381 new REA shares for each Rightmove share, REA said in the statement. The offer would provide a 27 per cent premium to Rightmove’s share price on August 30, the last trading day before news of REA’s interest leaked.
REA said in the statement that it submitted the non-binding indicative proposal to the Rightmove board on September 5 and was informed five days later that the board had rejected it. Initial proposals are often rejected as being too low.
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Rightmove ended London trading Tuesday at 670.80 pence, giving the company a market value of about £5.3 billion. REA’s shares fell as much as 2.3 per cent shortly after trading opened on Wednesday morning in Sydney.
Richmond, Victoria-based company REA, which is controlled by News Corp., said earlier this month that is was considering a possible cash and stock offer for Rightmove. A deal for Rightmove would boost the scale of REA, which is the largest player in the Australian online real estate industry and has already expanded into other markets including India.
REA has until 5pm London time on September 30 to announce a firm intention on whether to make a bid.
While Rightmove enjoys the largest market share in the UK property portal market, rival OnTheMarket recently launched an expansion drive after being acquired by US real estate firm CoStar Group Inc. In other major deals in the sector, private equity firm acquired property platform ZPG for almost £2.2 billion in 2018.
A deal for Rightmove would add to a range of UK-listed firms that have got foreign takeover interest this year, from gold miner Centamin to the parent of Royal Mail. Beverage maker Britvic and packaging firm DS Smith have also received bids from overseas. – Bloomberg
