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Australia’s REA Group has made a second takeover proposal for Britain’s largest property listings company Rightmove, valuing the business at close to £5.9bn, according to people familiar with the matter.
REA’s bid valued the FTSE 100 group at nearly 750p per share, the people said, marking a roughly 7 per cent increase from its previous offer.
Last week Rightmove said it had rejected the initial cash-and-shares bid from REA as being “wholly opportunistic”, and that it fundamentally undervalued Rightmove and its future prospects.
REA, which is controlled by Rupert Murdoch’s News Corp, said its initial proposal valued Rightmove’s shares at 705p, a 27 per cent premium to the UK company’s share price before the Australian company’s interest was made public.
Rightmove said the offer amounted to 698p a share at the time because REA’s stock had fallen since it made the offer.
As part of the initial offer, REA said Rightmove shareholders would own 18.6 per cent of the combined company based on its indicative offer. It intended to seek a secondary listing on the London Stock Exchange to allow UK investors to trade the shares, it said.
“The proposal combines certainty of value, in cash, at a significant premium to recent trading while at the same time giving Rightmove shareholders the opportunity to benefit from the future value creation of the combined business,” the group said in a statement.
Rightmove has an 80 per cent market share in online property listings but has warned of slowing customer growth. Rival OnTheMarket was acquired last year by US real estate data group CoStar and has since launched an expansion push.
Rightmove chief Johan Svanstrom has looked for growth in areas beyond its core sales and rental listings business, including mortgage services and commercial property.
The group’s shares were priced on Friday at about 674p in London trading. These have risen by about a fifth since news of the potential takeover broke. REA shares rose 0.5 per cent to A$198.99 on Friday.
Under UK takeover rules, REA has until the end of September to make a formal offer or walk away.
Neither REA nor Rightmove would comment.
