Rightmove Rejects REA's Latest $8.3 Billion Offer — Update

By Ian Walker

Rightmove rejected News Corp-controlled REA Group's fourth proposal, valued at 6.2 billion pounds ($8.29 billion), and called on the company to put forward its best and final offer ahead of Monday's bid deadline.

The London-listed online property portal said it had fully considered the latest proposal and that Chairman Andrew Fisher agreed to meet with REA Chair Hamish McLennan to present the offer and start talks, with a further meeting held with executives from both companies.

Rightmove said no information was presented at either meeting that was new or different from that which had previously been made public, or that changed its opinion about the proposal. It said the latest proposal remained unattractive and continued to materially undervalue Rightmove and its future prospects, and couldn't be recommended by the board.

It said the board believed it was in shareholders' best interests for the company to continue its standalone strategic plan as outlined in its capital markets day in November.

Rightmove also said REA had requested an extension to Monday's bid deadline in the talks. However, it said there was enough information about the company in the public domain for REA to put forward a proposal capable of being recommended within the timeframe.

REA has until 1600 GMT to either make a formal proposal to buy Rightmove or walk away under U.K. takeover rules.

Rightmove said it had also denied due diligence access to REA. "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," Rightmove said Monday.

On Friday the Australian real-estate advertiser tabled a new proposal to buy Rightmove--which followed the rejections of its previous three approaches--under which accepting Rightmove shareholders would receive 346 pence in cash and 0.0417 new REA shares for each share held. They would also receive a special dividend of 6 pence in cash, in lieu of any final dividend for this year.

The latest terms imply a value of 781 pence a Rightmove share, including the dividend, based on REA's closing price of 200.00 Australian dollars ($138.06) on Friday.

Rightmove shares were down 23.60 pence, or 3.5%, at 645.0 pence in early morning European trading. However, they are currently up 12% over the year to date.

"We respect REA and the success they have achieved in their domestic market. However, we remain confident in the standalone future of Rightmove," Fisher said Monday.

In its own statement on Friday, REA Chief Executive Owen Wilson said the board continued to see the potential to strengthen Rightmove and accelerate its growth. A merger would create a global technology leader operating in two of the most attractive markets in the world, he said.

REA also reiterated that it would apply for a secondary listing on the London Stock Exchange if a deal went ahead.

News Corp is the parent company of Dow Jones & Co., publisher of The Wall Street Journal and Dow Jones Newswires.

Write to Ian Walker at ian.walker@wsj.com

(END) Dow Jones Newswires

September 30, 2024 04:13 ET (08:13 GMT)

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