Australian property portal REA has walked away from making a bid for Rightmove after being rebuffed for a fourth time.
The listings business, which is controlled by Rupert Murdoch’s New Corp, said it was “disappointed” that the Rightmove board had not engaged in formal talks or recommended its potential offer.
Owen Wilson, CEO of REA, said: Against a backdrop of intensifying global competition, we approached Rightmove’s board because we strongly believed in the opportunity to create a globally diversified leader in the digital property sector that would benefit both REA and Rightmove shareholders. We were disappointed with the limited engagement from Rightmove that impeded our ability to make a firm offer within the timetable available. They had nothing to lose by engaging with us.
“We are always financially disciplined when we look at M&A and reinvestment in our business and will continue to focus on the many other opportunities ahead of us. Our recent investment in Athena Home Loans is a great example of this. We have a clear strategy to expand in our core business and adjacent markets, and India represents an exceptional opportunity for growth. We look forward to pursuing these opportunities and generating further value for REA shareholders.”
Earlier today in a statement to the stock exchange today Rightmove said the latest offer, which was made on Friday, “remains unattractive and continues to materially undervalue Rightmove and its future prospects.”
Under “put up or shut up” Takeover Panel rules REA, which is controlled by Rupert Murdoch’s New Corp, had until 5pm today to table a formal bid or walk away. It has been putting pressure on Rightmove’s board to engage in formal talks but all approaches were rebuffed.
The final offer would have seen Rightmove shareholders receive 346p in cash and 0.0417 new REA shares implying an offer value of 780 pence based on the closing price of REA on 30 September 2024. In addition they would get a 6p dividend “sweetener.”
In its response today Rightmove said its board “has unanimously concluded that the latest proposal is unattractive and materially undervalues Rightmove.”
“The Board has concluded that shareholder interests would be better served through the execution of Rightmove’s standalone strategic plan, with the multiple paths for long-term value creation which were laid out at the Capital Markets Day in November 2023.
“The Rightmove and REA teams have known one another for many years, and have had numerous interactions, including discussions around strategy and best practice as recently as June.
“Rightmove has taken every phone call that REA has made since its interest was first made public, with a level of engagement which in Rightmove’s view is customary and appropriate in the context of an unsolicited and unilateral series of approaches, made to a UK listed company, where the possible offeror is taking an incremental and iterative approach to price discovery.”
It added: “The Board has declined requests from REA to grant due diligence access as none of REA’s proposals received to date has been at a sufficient level to grant such access. Without a compelling proposal, it would not be appropriate or in the best interests of Rightmove or its shareholders to provide confidential and commercially sensitive information to REA.”
Chair Andrew Fisher, said:“We respect REA and the success they have achieved in their domestic market. However, we remain confident in the standalone future of Rightmove. Rightmove has been the leading operator in the UK for over 20 years, and it has differentiated market presence, branding and technology, and very significant opportunities for future growth.
“The last few weeks have been very disruptive, as well as unsettling for our colleagues. “
