The UK-based online property portal Rightmove has turned down an improved £6.1bn a third takeover bid from billionaire Rupert Murdoch’s REA Group, stating that the offer undervalued the company.
According to Rightmove, the latest offer, consisting of 341p in cash and 0.0422 new REA shares for each Rightmove share, implied a value of 759p per share. REA, however, estimated the total offer value to be 770p.
The value of REA’s offer has been impacted by a significant drop in its share price, which closed at $189.99 last night—down more than 13% since August 30, before the offer period began.
Rightmove’s board, after consulting with its financial advisers, unanimously rejected the new bid.
REA, which appeared to adopt a more assertive stance in its latest offer, faces a put-up-or-shut-up deadline of 5 p.m. on September 30 to either make a formal bid or withdraw.
Analysts have suggested that Rightmove’s rejection could push REA toward a hostile bid. However, in a separate statement, the Australian company reiterated its disappointment with the rejection and frustration over the lack of engagement from Rightmove.
REA urged Rightmove shareholders to encourage the board to “enter into constructive discussions with REA to pursue a recommended transaction” before the deadline.
As for increasing its bid, REA emphasized its commitment to a disciplined capital allocation strategy, adding that there is “no certainty that an offer will be made to Rightmove shareholders or that any transaction will take place.”
REA expressed its disappointment with the latest rejection, adding that it was “frustrated” by Rightmove’s lack of meaningful engagement despite multiple offers.
