REA Group Ltd on Friday issued its fourth acquisition proposal to the board of Rightmove PLC, urging the company to engage in dialogue and extend the offer deadline.
The Melbourne, Australia-based digital advertising company, majority owned by Rupert Murdoch’s News Corp, has issued its fourth proposal in an attempt to acquire the Milton-Keynes, England-based online real estate company.
It follows offers previously rejected earlier in September that initially valued Rightmove at £5.6 billion before REA upped its offer to £6.1 billion.
Rightmove said at the time that the offer, ‘continues to be unattractive and materially undervalues the company and its future prospects’.
The terms of the fourth proposal outline that Rightmove shareholders would receive for each share owned, 346 pence in cash and 0.0417 of a new REA share. This would be supplemented by a 6p per share special dividend meaning the fresh offer values individual Rightmove shares at 781p each, implying a total company value of £6.2 billion.
Shares in Rightmove were down 1.6% at 654.55p each in London on Friday morning. REA shares closed 0.9% higher in Sydney at A$200.00. Rightmove has a market capitalisation of £5.18 billion, while REA’s market cap is A$26.42 billion, about £13.59 billion.
‘This is a compelling opportunity to create a true global technology leader on the London market via a secondary listing, operating in two of the most attractive markets in the world,’ said REA’s Chief Executive Officer Owen Wilson.
The new proposal represents an 11% increase from the initial 705p per share proposal made to the Rightmove board on September 5, and would grant Rightmove shareholders approximately 20% of the combined entities issued share capital on completion.
‘REA will make a mix and match facility available to Rightmove shareholders in order to provide flexibility by enabling them to elect to vary the proportions in which they receive new REA shares and cash in respect of their holdings in Rightmove shares. The total number of new REA shares to be issued and the maximum aggregate amount of cash to be paid under the terms of the fourth proposal will not be varied as a result of elections under the mix and match facility.’
Under this proposal, Rightmove shareholders also remain entitled to the 3.7p interim dividend announced in July.
‘REA has repeatedly requested meetings with Rightmove but no meetings have taken place and as such there has been no substantive engagement beyond cursory procedural telephone calls with the Rightmove chairman.
‘REA is ready to engage immediately and firmly believes that engagement is now essential in order to progress the proposal and an extension to the 30 September 2024 deadline should be granted by the [Rightmove] board,’ REA commented.
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