REA Group raises Rightmove takeover bid to £6.1bn

REA Group has increased its takeover bid for Rightmove to £6.1bn, £500m more than its initial proposal.

The Australian property listings website, majority-owned by Rupert Murdoch’s News Corporation, has submitted a new offer valuing Rightmove shares at 770 pence each.

It represents a 9.2 per cent increase on its original offer of £5.6bn, which Rightmove rejected as too low and “totally opportunistic”.

Having also rejected a £5.9bn bid, REA said its latest offer “represents a very compelling proposition” for Rightmove investors, who would own 20 per cent of the enlarged company if the takeover goes ahead.

Under the deal, Rightmove investors would receive 341p in cash for each share they hold, along with just over 0.04 new REA shares.

Melbourne-based REA also said the transaction would “enhance the UK real estate experience for buyers, sellers and tenants, positively contributing to the real estate market ecosystem.”

Owen Wilson, CEO of REA, said: ‘We believe that combining our world-leading expertise and technology with Rightmove’s compelling business will create an enhanced experience for property agents, buyers and sellers.

‘We live in a world of increasingly intense competition, and this proposed transaction would bring together two highly complementary digital property businesses for investment and growth.’

REA urged Rightmove bosses to start talks, saying it has had “no substantial engagement” with the company since the offer period began.

Rightmove told shareholders it would “carefully consider” REA’s new offer with its financial advisers.

Over the past two years, the London-based group has enjoyed solid results despite higher interest rates and cost-of-living pressures that have hit the property market.

In the first half of 2024, its turnover increased by 7 per cent to £192.1 million thanks to contract renewals by estate agents and property developers, while operating profits increased by 2 per cent to £131.6 million.

Rightmove maintained its full-year guidance following this performance, with revenue expected to grow by between 7 and 9 percent.

Andrew Fisher, Chairman of Rightmove, said: ‘Rightmove is an exceptional company with a very clear strategy, a consistent track record of delivery and a strong management team.

“The Board of Directors is confident in the Company’s short- and long-term prospects and believes there is a long way to go to continue creating value for shareholders.”

If REA were to acquire Rightmove, it would represent another massive blow to London markets, which have lost multiple major companies in recent years to overseas buyers.

UK-listed companies are often seen as easy takeover targets due to the devaluation of the pound since the Brexit vote and a perceived undervaluation relative to global peers.

Companies that have struck acquisition deals in recent months include Britvic, Hargreaves Lansdown, Keywords Studios and cybersecurity giant Darktrace.

Rightmove shares rose 2.6 percent to 691.8 pence on Monday morning.