UK real estate portal Rightmove will consider a sweetened 6.2 billion pound ($8.29 billion) takeover bid from Rupert Murdoch-owned Australian firm REA Group, it said on Friday, after rejecting three previous bids.
The new proposal from REA, a property listing firm, comprises an offer price of 775 pence per share, a 17% premium to Rightmove‘s closing price on Thursday. The company has also offered an additional special dividend of 6 pence per share.
REA’s new bid is 1.4% higher than its previous 770 pence per share, or 6.1 billion pounds, and 11% more than its first offer of 705 pence a share.
“As it has done throughout this process, the board will consider the latest proposal together with its financial advisers,” Rightmove said in a statement.
REA reiterated its “disappointment and surprise” at the British real estate portal’s repeated rejections of its takeover offers.
The company also urged Righmove’s shareholders to ask the board to engage in talks after no substantive engagement from the British firm’s board despite repeated requests.
Rightmove, which has maintained stable revenue growth recently, rejected the last three proposals from REA, saying they undervalued the company and were “uncertain, highly opportunistic and unattractive”.
Sean Kealy, research analyst at Panmure Liberum said the fourth offer remained unconvincing and questioned the rationale behind the new deal, citing integration costs and limited synergies. “Overall, this offer is not significantly different to previously.”
The UK’s housing market is likely on an upswing as the country lowers borrowing costs and as the newly installed Labour government tries to lift the housing supply by introducing a raft of reforms.
REA has expanded into other regions including India and reiterated that it would look to apply for a secondary listing in London to access a wider pool of investors.
The company’s shares ended 0.9% higher at A$200 on Friday. Rightmove shares reversed course after the announcement of the new offer to trade 1.2% lower at 657.2 pence
REA requested an extension of the Sept. 30 deadline to make a firm binding offer. Rightmove shareholders would hold 20% of the combined group should the deal go through, REA said.
Reuters
