The Rupert Murdoch-controlled property group vying to buy Rightmove has tabled a fourth £6.2bn bid for the firm and called on its board to engage in talks today as a deadline for the deal looms next week.
In a statement to the market, REA Group, part of the Aussie media magnate’s business empire, said it was willing to pay the equivalent of 775p per share plus a special dividend of 6p per share after its first three bids were rejected.
“While the Rightmove Board has refused to meet with us, we have enjoyed the opportunity to connect with Rightmove shareholders and to share our vision for the combination of the no. 1 digital property businesses in the UK and Australia,” said Owen Wilson, boss of REA. “We continue to see the potential for us to strengthen Rightmove and accelerate its growth.”
A tie-up between the two firms would see Rightmove retain a secondary listing on the London Stock Exchange, Wilson added. REA has also requested an extension to the regulatory deadline for a deal beyond Monday.
The latest bid from Rea comes after its third £6.1bn offer was rejected on Wednesday on the grounds it “materially undervalue[d] the company and its future prospects”.
Rightmove is yet to respond to the latest swoop but analysts suggested earlier this week that REA would need to markedly sweeten its offer to win round the board.
Shareholders appear to be torn over the potential deal, with some frustrated at Rightmove’s alleged lack of engagement.
Sydney-headquartered GCQ Funds Management, a large Rightmove shareholder, wrote to the board to urge it to engage with REA.
“I commend the Rightmove board for rejecting the initial lowball offers,” Doug Tynan, chief investment officer of GCQ told the Australian Financial Review after Rightmove hiked its bid on Monday.
“However, the revised £7.70 proposal demonstrates the seriousness of REA’s intent and as a consequence, we are at the point where it is in shareholders’ interests for the board to engage with REA,” he added.
Similarly, Phil King, the chief investment officer of Regal Partners, which holds stakes in both Rightmove and REA, said earlier this week: “In our view [Rightmove] don’t appreciate the upside to the REA share price if the deal is successful and the downside to the Rightmove share price if the offer is withdrawn.”
But Baillie Gifford fund manager Iain McCombie has said shareholders will not let Rightmove be taken over cheaply.
“People worried about CoStar buying OnTheMarket, but it hasn’t done well,’ McCombie recently told an audience of private investors in London. “Rightmove is the cheapest property portal in the world by a margin. REA Group noticed that and made a bid.
“We’re not going to sell that cheaply because it is a unique business and has a dominance there in this market.”