Except translation, this story has not been edited by achinews staff and is published from a syndicated feed.
Melbourne-based Rea’s two previous offers were rejected by Rightmove earlier this month – but this time the property website’s board has said it will “carefully consider the increased offer”.
By making a third bid for Rightmove, Rea is clearly serious about getting hold of the UK market leader but as Russ Mould, AJ Bell’s investment director points out, “there’s only so much song and dance you can do with takeovers”. He says: “Rea really needs to show her best and final offer. If it’s not enough to win over Rightmove’s board and shareholders, the bidder needs to walk away and think of different ways to expand his empire.”
Susannah Streeter, head of money and markets at Hargreaves Lansdown, credited Rea with “a decision to gain a major foothold in the UK property search market by significantly increasing its takeover bid for Rightmove”. She also notes: “The group is frustrated by the lack of engagement from Rightmove who have clearly been holding out for a much higher offer after the highly opportunistic first bid.”
A takeover would make Rightmove the latest of London’s leading companies to disappear from the FTSE 100 index.
Is this new offer of around £6.1 billion, or 770p per share, going to be enough to satisfy shareholders? It is unlikely, said Mr Mold of AJ Bell, although he admitted that “this looks like a serious pursuit, although the bidder’s idea of fair value still does not match the expectations of the shareholders”.
Rightmove, which acts as a “window shop” for estate agents to list properties for sale, has dominated the UK buying and selling market and challenged the traditional high street house selling model in recent years. Its portal also allows buyers and sellers to track market trends in their area.
It has competitors – OnTheMarket and Zoopla – but Rightmove continues to retain its crown. Rea’s interest, therefore, makes sense as it leads the online digital property market in Australia. And although Rea said he was “really disappointed with the lack of engagement” from the Rightmove board, the fact that the UK business is now ready to look at the proposal put forward moves the dial on the potential deal.
However, Rightmove chairman Andrew Fisher remains steadfast in his view that Rightmove is “an outstanding company with a very clear strategy, a consistent track record of delivery and a strong management team”, stating: “The board is confident in the company’s brief history. and long-term outlook and sees a long runway for continuing to create shareholder value.
“Based on the value and implicit structure of Rea’s first and second indicative non-binding proposals, we considered these proposals to be uncertain, highly opportunistic and unattractive. Accordingly, the board unanimously rejected them.
“The board will continue to act on behalf of our shareholders and will respond to the latest proposal in due course.”
(Except translation, this story has not been edited by achinews staff and is published from a syndicated feed.)
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