Murdoch portal ‘to make second bid for Rightmove’

CEO Owen Wilson and Australian company REA Group, which is owned by Rupert Murdoch's News Corp, is reported to be preparing another offer for Rightmove after its first bid was unanimously rejected by the portal's board.

The Australian portal that made a takeover bid for Rightmove may come back with a second offer, it is reported.

REA Group’s first bid of £5.6 billion was unanimously rejected by the Rightmove board as being too low, but the company owned by Rupert Murdoch’s News Corp may raise the amount.

And another offer closer to £6 billion could come as early as this week, according to a report in the Mail on Sunday.

Bid deadline

REA, which is the largest property portal in Australia, and its CEO Owen Wilson (main picture) now have until 30 September or less than two weeks, to bid again.

The Rightmove board said the first offer was “unsolicited” and far too low, undervaluing the business.

A statement from Rightmove said it received “an unsolicited, non-binding and highly conditional proposal from REA regarding a possible cash and shares offer”.

“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.”

£7 billion bid

Shares in Rightmove rose by a staggering 27% in a single day after news broke about the possible takeover deal early in September, and remain around 24% higher than a month ago.

REA would have to increase its bid to more than £7 billion to be successful, according to City analyst Sean Kealy at Panmure Liberum.

I think Rightmove have done exactly the right thing in rejecting this.”

The offer amounted to a 27% premium on each share, but this would need to be raised significantly to be accepted by Rightmove, he said.

“I think Rightmove have done exactly the right thing in rejecting this because it’s a very small premium to a suppressed valuation relative to what I think it’s worth.”

Kealy told the Daily Telegraph a successful deal would require a premium of 60%, which would value Rightmove at roughly £7.1 billion.


One Comment

  1. It is the extra revenue that follows any acquisition that is the big stumbling block, agents in the UK pay portals to list inventory, in Australia the REA model is vendors pay. It could also of course be an opportunity signalling what is coming anyway – the public listing and selling to themselves, in the same way Autotrader is about to change its business model. Classifieds Ads gets you so far, but getting buyers and sellers upstream well that is where the biggest amount of profit lies. And on the premium figure, 45% would be plenty, as Rightmove has until now not had CoStart Group funding up against it … which in next few years will take chunks out of their revenue streams, just as happened in America.

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