UK portal Rightmove’s board of administrators has unanimously rejected Information Corp subsidiary REA Group’s $7.32 billion acquisition bid, saying it “fundamentally undervalues” the corporate’s present and future prospects.
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REA Group’s bid to purchase the UK’s largest actual property portal, Rightmove, has failed.
Final week, the Sydney-based Information Corp subsidiary introduced plans to buy Rightmove for $7.32 billion in a cash-and-stock takeover proposal. REA Group stated the deal would strengthen each manufacturers’ positions because the main residential actual property portals of their respective markets by offering Rightmove with the capital and technical capabilities wanted to speed up its development.
“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 corporate stated in an announcement on Sept. 3.
Regardless of the provide exceeding Rightmove’s market cap of $7.1 billion, the portal’s board of administrators stated REA Group’s proposal was “wholly opportunistic” and “fundamentally undervalued” the corporate.
“The Board of Rightmove notes the announcement from REA Group Ltd (“REA”) and confirms that it obtained an unsolicited, non-binding, and extremely conditional proposal from REA relating to a doable money and shares provide to accumulate your entire issued and issued odd share capital of Rightmove (the “Proposal”),” the board stated in an announcement to the London Inventory Trade. “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) shares elevated 20 p.c within the days after REA Group’s proposal hit the information and have continued to rise, reaching a one-year excessive of $17.60 per share on Sept. 11.
Though Rightmove appears to have slammed the door on the acquisition, UK actual property chief Chris Watkins advised Property Trade Eye the rejection might push REA Group to make a extra aggressive transfer — an actual risk as Information Corp seems to be to up the ante on its competitors with CoStar Group, which bought 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 stated. “Might REA’s preliminary bid have been a strategic step, realizing it might be rejected, to pave the way in which for a possible hostile takeover? With Rightmove shareholders now within the highlight, REA might return with a direct provide 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.
