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- Rightmove said it will consider the latest proposal.
- It has already rejected three previous offers worth £5.6bn, £5.9bn and £6.1bn.
- The property website did not grant Rea’s request to extend the bid submission deadline.
An Australian property giant owned by Rupert Murdoch was told last night that it needs to offer at least £7bn for Rightmove to have any chance of a deal.
It came after Rea Group made a fourth bid for the British house sales giant, valuing the company at £6.2bn.
Rightmove said yesterday it will consider the latest proposal, having already rejected three previous bids worth £5.6bn, £5.9bn and £6.1bn.
And the FTSE 100 property website group did not agree to Rea’s request to extend the bid submission deadline from 5pm on Monday.
Rightmove shares rose 0.5 per cent, or 3.6p, to 668.6p yesterday, still languishing below the offer price of 781p, in a sign that investors do not believe a deal will be reached. an agreement.
No deal: Rupert Murdoch’s Rea Group was told it needed to offer at least £7bn for Rightmove to have a chance of a deal
Rea said he was “disappointed” that Rightmove’s board, led by chairman Andrew Fisher, had not yet entered into acquisition talks. The Melbourne-based group’s chief executive, Owen Wilson, flew to London yesterday hoping to meet with Rightmove directors. He joined Rea chairman Hamish McLennan, who flew out earlier this week to meet Rightmove shareholders. They will hold further talks with Rightmove shareholders over the weekend, urging them to pressure the company’s board to get involved.
“Rea has repeatedly requested meetings with Rightmove, but no meetings have taken place and, as such, there has been no substantive engagement beyond perfunctory procedural phone calls with the Rightmove chairman,” a Rea spokesperson said.
Several investors, including Axa, have blown their cover to say Rightmove directors should come to the table. But others said the real estate platform should remain calm.
“Rightmove’s board should be in no rush, if any, to negotiate with Rea based on his slightly improved offer,” a spokesperson for Sanford DeLand Asset Management, which owns a £16m stake in the company.
“We do not share Rea’s logic that a combination will create value given that it has no existing operations in the UK.”
He said there was “no appeal” in “exchanging 100 per cent of what is a great British organic growth story for part cash and part paper in Rea, which has been brought together largely through mergers and acquisitions”.
“It would take nothing less than a knockout offer with an all-cash alternative to change our mind,” he added.
Peel Hunt analysts Jessica Pok and Melanie Yang said the new offer was “not strong enough” and cast doubt on Rea’s ability to raise its offer further.
They said Rightmove is worth at least £7bn.
“If Rightmove agrees to extend the deadline for a formal offer, it opens the possibility for Rea to increase its offer,” they said.
“However, we do not believe Rea will be able to significantly increase the offer price.”
Dan Coatsworth, investment analyst at AJ Bell, said: ‘Rea doesn’t seem to get the message. To really close this deal, Rea needs to consider a cash offer. Shareholders know they own a unique asset to the UK stock market and the market leader in UK property portals. “They’re not going to give it up unless Rea pays a higher price.”
Suggesting Rea would have to pay more than 800p a share, he added: “He needs to dig much deeper or leave.”
Rea offered 781 pence per Rightmove share, including a special dividend of 6 pence. It has committed to a secondary listing in London that would allow British investors to own Rightmove shares.
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