Rightmove rejects latest REA Group offer and says ‘put up or shut up’

A hostile takeover of Rightmove is on the cards after the portal’s board this morning unanimously rejected REA Group’s latest offer for its business.

Rightmove says the new offer, which was pitched on Friday, remains “unattractive  and continues to materially undervalue [the portal] and its future prospects and that [its] Board cannot recommend the ‘latest proposal’ to shareholders”.

The board has also rejected REA Group’s request to have give it more time to put further offers forward, which means the Australian portal giant now has no choice but to either withdraw, submit a better offer before the end of today or mount a hostile takeover, which would be far more tricky, expensive and time consuming.

Rightmove adds that: “Since the commencement of the offer period on 2 September 2024, the Rightmove Board, together with its financial and legal advisers, has carefully considered the terms of each proposal put forward by REA.

“The Board’s deliberations have taken into consideration, inter alia, the implied value proposition of these proposals for Rightmove shareholders and the mix of cash and REA shares being proposed.

“[Our] assessment of each proposal has centred on a comparison of the implied value of the proposal with its own view of the standalone value and future prospects of Rightmove.

“[We have] also consulted with and taken into consideration the views expressed to it from across the full spectrum of its shareholder base.

“Throughout this process, the Board has remained focussed on the best interests of shareholders as a whole, with a view to following a course of action which, in its judgement, will promote the success of Rightmove and maximise shareholder value in the medium to long term.

Unattractive

“The Board has unanimously concluded that the latest proposal is unattractive and materially undervalues Rightmove [and] concluded that shareholder interests would be better served through the execution of Rightmove’s standalone strategic plan, with the multiple paths for long-term value creation which were laid out at the Capital Markets Day in November 2023”.

In response to criticisms from REA Group in recent days that it has failed to engage with its offers, the Board added: “The Rightmove and REA teams have known one another for many years, and have had numerous interactions, including discussions around strategy and best practice as recently as June.

“Rightmove has taken every phone call that REA has made since its interest was first made public, with a level of engagement which in Rightmove’s view is customary and appropriate in the context of an unsolicited and unilateral series of approaches, made to a UK listed company, where the possible offeror is taking an incremental and iterative approach to price discovery.”

Respect

Andrew Fisher (main image), Rightmove’s Chair, adds: “We respect REA and the success they have achieved in their domestic market. However, we remain confident in the standalone future of Rightmove. Rightmove has been the leading operator in the UK for over 20 years, and it has differentiated market presence, branding and technology, and very significant opportunities for future growth.

“The last few weeks have been very disruptive, as well as unsettling for our colleagues. To the extent REA wants to put forward a further proposal, I urge them to submit a best and final proposal ahead of today’s 5pm PUSU deadline such that we can bring certainty to this process.

“Our world-class team is executing against our strategic plan, and continuing to drive innovation and accelerate growth to deliver compelling shareholder value.”

Pic credit; Loughbrough University.