An Australian property company backed by billionaire Rupert Murdoch has raised the stakes in its takeover plans for Rightmove, submitting a third bid after the company’s shareholders rejected two previous offers.
Melbourne-based REA, which is majority-owned by Murdoch’s News Corp Australia, on Monday unveiled the fresh bid of 341 pence in cash per share plus 0.0422 new REA shares
The offer implies a total offer value of 770 pence for each Rightmove share and values the company at £6.1 billion. It represents a 9.2% premium on the previous offer made earlier in the month.
Owen Wilson, CEO of REA, 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 are genuinely disappointed at the lack of engagement by Rightmove’s board and we strongly encourage the Rightmove board to engage.”
Rightmove shares rose 2.7% to 692p after trading opened in London. The company’s board said it would respond to the third offer ‘in due course’ after having unanimously rejected the previous two bids.
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 company reported revenues of £192m for the first six months of the year, an increase of 7% on the previous year, while pre-tax profits nudged up slightly to £133m.