Rightmove has dismissed a £5.6 billion bid from Rupert Murdoch’s REA Group, citing concerns over the proposal’s perceived opportunism. Analysts note the offer included a 27% premium, which led to a significant increase in Rightmove’s share price. The board of Rightmove unanimously rejected the bid, stating it undervalues the company’s future potential. Observers are closely watching the deadline for a formal offer.
- Rightmove’s board unanimously rejected a £5.6 billion offer from REA Group, describing the proposal as opportunistic.
- The rejected bid included a 27% premium, causing Rightmove shares to rise significantly.
- REA Group, aiming for a London Stock Exchange listing, faces a deadline to formalise or withdraw its offer by September 30.
- Market dynamics and leadership changes within Murdoch’s empire add complexity to the unfolding scenario.
The board of Rightmove, the UK’s leading online estate agent, has turned down a £5.6 billion takeover bid from REA Group, controlled by Rupert Murdoch’s News Corp. This bid included a cash and share proposal valuing Rightmove at 705p per share, representing a 27% premium above the current market valuation. The board concluded that the bid was ‘wholly opportunistic’ and did not reflect Rightmove’s potential growth and value.
REA Group, with a market valuation of A$26 billion, has been keen on acquiring Rightmove, a move that aligns with its strategy to diversify beyond traditional media. The announcement of the bid caused a 25% surge in Rightmove’s share price, raising its market valuation to £5.3 billion.
According to city takeover regulations, REA Group has until 5pm on September 30 to make a formal offer or withdraw. This bid, if successful, would see Rightmove shareholders owning approximately 18.6% of the combined entity, while retaining rights to an interim dividend of 3.7 pence per share. REA argues that their proposal offers ‘certainty of value’ with financial backing through a mix of debt and funds.
The offer also anticipated a secondary listing for REA on the London Stock Exchange, aiming to attract a global investor base interested in a diversified digital property platform. The rejection by Rightmove comes during a tough phase for the UK property market, impacted by high mortgage rates. However, there’s optimism for improved market conditions as interest rates are predicted to decline.
This bid is part of a larger strategy by the Murdoch family, with Rupert, aged 93, in the process of transitioning leadership to his eldest son, Lachlan. This leadership shift, coupled with modifications to the family trust, sets the stage for potential internal family legal disputes. Achieving control over Rightmove would have been a strategic expansion for REA Group.
Rightmove’s decisive rejection of REA Group’s proposal underscores their confidence in the company’s existing and future market position.
