News Corp-owned REA sweetens takeover offer for UK's Rightmove to US$8.3 billion

AUSTRALIA’S REA Group, owned by Rupert Murdoch controlled-News Corp, bumped up its takeover bid for Rightmove to £6.2 billion (S$10.6 billion) on Friday (Sep 27), after the UK company rejected three of its previous offers.

The new proposal from REA, a property listing firm, comprises an offer price of 775 pence apiece, a 17 per cent premium to Rightmove’s closing price on Thursday. The company has also offered an additional special dividend of 6 pence per share.

REA’s new bid is 1.4 per cent higher than its previous offer of 770 pence per share, or £6.1 billion, and 11 per cent more than its first offer of 705 pence a share.

Rightmove did not immediately respond to a Reuters request for comment.

REA reiterated its “disappointment and surprise” at the British real estate portal’s repeated rejections of its takeover offers.

The company also urged Righmove’s shareholders to ask the board to engage in talks after no substantive engagement from the British company’s board despite repeated requests.

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Rightmove, which has maintained stable revenue growth in the recent past, rejected the last three proposals from REA, saying they undervalued the company and were “uncertain, highly opportunistic and unattractive”.

Sean Kealy, research analyst at Panmure Liberum said the fourth offer remained unconvincing and questioned the rationale behind the new deal, citing integration costs and limited synergies. “Overall, this offer is not significantly different to previously.”

UK’s housing market is likely on the upswing as the country lowers borrowing costs and as the newly installed Labour Party government has tried to lift the housing supply by introducing a list of reforms.

REA has already expanded into other regions including India, and reiterated that it would look to apply for a secondary listing in London to give it access to a wider pool of investors.

The company’s shares, ended 0.9 per cent higher at A$200 on Friday. Rightmove shares reversed their course after the deal announcement. The stock, which was earlier trading slightly in the green, traded 1.2 per cent lower at 657.2 pence

REA requested an extension of Sep 30 deadline to make a firm binding offer. Rightmove shareholders would hold 20 per cent of the combined group if deal goes through, REA said. REUTERS