- Third offer from Australian rival made
- Revised proposal implies an offer value of 761p
- Year-to-date Rightmove shares are up 22%
Shares in Rightmove (RMV) jumped nearly 2% higher to 683p, as Australian property listing company REA Group (REA:ASX) controlled by Rupert Murdoch’s News Corp increased its offer for the online property portal.
Rightmove said it had ‘received a third unsolicited, non-binding and highly conditional proposal from REA for a possible cash and share offer at 341 pence in cash and 0.0422 new REA shares for each Rightmove ordinary share’.
The online property portal’s chair Andrew Fisher said the Rightmove board will continue to act on behalf of their shareholders and ‘respond to the most recent proposal in due course’.
BACK FOR A THIRD TIME
Russ Mould, investment director at AJ Bell said: ‘Rupert Murdoch’s REA Group is back for the third time with a higher bid for the UK property portal, but it still doesn’t look like the price is generous enough. Shareholders are more likely to sit up and show interest if the bid starts with an eight, not a seven – and so the latest bid of 770p is a step in the right direction but unlikely to be enough.
‘The fact REA has now made three different offers shows it is serious about wanting to own Rightmove. Pouncing on the business after a lacklustre period for the share price, there was always the chance REA was simply trying its luck while the target was going through a tough period. That no longer appears to be the case. This looks like a serious pursuit, albeit one where the bidder’s idea of fair value still doesn’t align with shareholders’ expectations.
‘The market reaction tells you everything you need to know. There is a slim chance the deal will happen at the current price given the shares are trading at 690p, 10% below REA’s bid.’
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DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Tom Sieber) own shares in AJ Bell.
