UK portal Rightmove’s board of directors has unanimously rejected News Corp subsidiary REA Group’s $7.32 billion acquisition bid, saying it “fundamentally undervalues” the company’s current and future prospects.
Whether it’s refining your business model, mastering new technologies, or discovering strategies to capitalize on the next market surge, Inman Connect New York will prepare you to take bold steps forward. The Next Chapter is about to begin. Be part of it. Join us and thousands of real estate leaders Jan. 22-24, 2025.
REA Group’s bid to buy the United Kingdom’s largest real estate portal, Rightmove, has failed.
Last week, the Sydney-based News Corp subsidiary announced plans to purchase Rightmove for $7.32 billion in a cash-and-stock takeover proposal. REA Group said the deal would strengthen both brands’ positions as the leading residential real estate portals in their respective markets by providing Rightmove with the capital and technical capabilities needed to accelerate its growth.
“REA sees a transformational opportunity to apply its globally leading capabilities and expertise to enhance customer and consumer value across the combined portfolio and to create a global and diversified digital property company, with number 1 positions in Australia and the UK,” the company said in a statement on Sept. 3.
Despite the offer exceeding Rightmove’s market cap of $7.1 billion, the portal’s board of directors said REA Group’s proposal was “wholly opportunistic” and “fundamentally undervalued” the company.
“The Board of Rightmove notes the announcement from REA Group Ltd (“REA”) and confirms that it received an unsolicited, non-binding, and highly conditional proposal from REA regarding a possible cash and shares offer to acquire the entire issued and issued ordinary share capital of Rightmove (the “Proposal”),” the board said in a statement to the London Stock Exchange. “The Board carefully considered the Proposal, together with its financial advisers, and concluded that it was wholly opportunistic and fundamentally undervalued Rightmove and its future prospects.”
“Accordingly, the Board unanimously rejected the Proposal on 10 September 2024,” they added. “Rightmove shareholders should take no action in respect of the Proposal. This announcement is being made without the agreement or approval of REA. There can be no certainty that any offer will be made nor as to the terms on which any offer may be made.”
Rightmove’s (OTCMKTS: RTMVY) stocks increased 20 percent in the days after REA Group’s proposal hit the news and have continued to rise, reaching a one-year high of $17.60 per share on Sept. 11.
Although Rightmove seems to have slammed the door on the acquisition, UK real estate leader Chris Watkins told Property Industry Eye the rejection may push REA Group to make a more aggressive move — a real possibility as News Corp looks to up the ante on its competition with CoStar Group, which purchased Rightmove rival OnTheMarket for about $126 million in December.
“While Rightmove’s board has just turned down a [$7.32 billion] bid from Australia’s REA Group, stating that the offer fundamentally undervalued the company’s future potential, could this rejection play into REA’s hands for a more aggressive move?” Watkins said. “Could REA’s initial bid have been a strategic step, knowing it would be rejected, to pave the way for a potential hostile takeover? With Rightmove shareholders now in the spotlight, REA could return with a direct offer to them — bypassing the board altogether.
“Hostile takeovers mean they don’t have to pay the premium that friendly takeovers have to pay. Either way, estate Agents need to be aware,” he added.
Email Marian McPherson
