REA raises offer for Rightmove by 10% saying takeover will be ‘good for agents’
Australian portal firm says its bid to buy Rightmove is not opportunistic and bemoans 'lack of engagement' from board over offer.
The REA Group’s attempt to buy Rightmove has taken a new twist after the Australian firm increased its offer for the portal by nearly 10%, its CEO (pictured) has revealed.
REA Group has raised the price it is willing to pay for Rightmove’s stock to £7.70 a share valuing Rightmove at £6.1 billion, or a 39% premium to Rightmove’s current £5.56p a share price.
The offer was made yesterday but disclosed this morning to the City and is a substantial improvement on the offer made two weeks ago but rejected by the Rightmove board.
REA Group has a big hill to climb, as it must both persuade its own shareholders and Rightmove’s too that the deal represents ‘fair value’. But REA Group’s CEO Owen Wilson is clearly frustrated that the Rightmove board has ‘failed to engage’ with the offer and believes it to be a ‘wholly opportunistic’ bid.
In the statement, REA Group points out that Rightmove’s share price has lacked “any sustained upward momentum for two years”.
Rationale
“REA’s approach is driven by the strong strategic rationale that it sees for the proposed transaction and REA believes now is a natural time to be able to support and accelerate Rightmove’s strategic objectives for the benefit of all stakeholders.
“REA’s expertise will enable it to support Rightmove in retaining its number one market position given the heightened competition and increased investment in the market and de-risk the execution of its strategy.”
Wilson adds: “We believe that the combination of our world-leading expertise and technology with the attractive Rightmove business will create an enhanced experience for agents, buyers and sellers of property.
Competition
“We live in a world of intensifying competition and this proposed transaction would bring together two highly complementary digital property businesses for investment and growth. We have today increased our proposal to an implied value of 770 pence – it provides a combination of immediate value certainty in cash and at the same time gives Rightmove shareholders an increasing opportunity in core digital property and adjacencies where we have much expertise.
“We are genuinely disappointed at the lack of engagement by Rightmove’s board and we strongly encourage the Rightmove Board to engage.”
Rightmove response

Andrew Fisher, Rightmove’s Chair, says: “Rightmove is an exceptional company with a very clear strategy, a consistent track record of delivery and a strong management team. The Board is confident in the Company’s short and long term prospects, and sees a long runway for continued shareholder value creation.
“Based on the implied value and 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 respond to the most recent proposal in due course.”