Rightmove rejects REA Group's third offer valued at $8.1 billion
By Louis Goss
Rightmove has rejected REA Group's third takeover offer that was submitted on Monday, claiming the Melbourne company's improved GBP6.1 billion ($8.1 billion) bid continues to undervalue its business.
REA Group, the Australian property listings website that is controlled by News Corp., had submitted its third improved offer to acquire the U.K.'s top online real estate agent on Monday, having submitted an initial GBP5.6 billion bid on Sept.5.
In a statement, Rightmove said it had now rejected REA Group's most recent "unsolicited, non-binding and highly conditional proposal" in stating the bid "continues to be unattractive and materially undervalues the Company and its future prospects."
REA Group responded in stating it was "disappointed" by the Milton Keynes firm's latest rejection and that it is "frustrated" that it "has still had no substantive engagement with Rightmove," on the possible acquisition.
"REA continues to firmly believe that the Further Improved Proposal represents a highly compelling proposition for Rightmove's shareholders at a significant premium to relevant trading metrics," REA Group said in a statement.
REA Group's bid on Monday saw it offer to pay 341 pence per share in cash and 0.0422 new REA Group shares for each ordinary Rightmove share, in what REA Group said would see it pay 770 pence per share, or GBP6.1 billion, overall.
Rightmove instead said REA Group's most recent cash and shares offer would see the Australian firm acquire Rightmove at a price of just 759 pence per share, as a result of the slump in REA Group's share price since its initial bid.
REA Group (AU:REA) shares, listed in Sydney, were down by 1% in Wednesday's session, having gained 6% in the year-to-date. Rightmove (UK:RMV) shares, listed on the London Stock Exchange, were up fractionally on Wednesday morning, having gained 23% this year.
News Corp (NWS) first got involved in REA Group in 2001 after acquiring a 44% stake in the online real estate agent for AU$2 million ($1.4 million) in cash and a further AU$8 million worth of print and TV advertising.
The media business later upped its holding in REA Group to become a majority owner, with a 61.42% in Australia's largest online real estate company in 2005. REA Group later acquired stakes in similar businesses worldwide including Britain's Zoopla and America's Move Inc.
MarketWatch is owned by Dow Jones, a subsidiary of News Corp.
-Louis Goss
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
09-25-24 0420ET
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