Rightmove has rejected a £6.2bn takeover offer from REA Group, the Australian real estate firm backed by Rupert Murdoch’s News Corp.
The UK property portal told the City on Monday morning that its board had turned down REA’s fourth offer, having concluded it was “unattractive and materially undervalues Rightmove”.
The rejection came less than 10 hours before a “put up or shut up” deadline – at 5pm UK time on Monday – for REA to either make a firm offer or walk away. Rightmove says that if REA wishes to make a fifth offer, it should make a “best and final proposal” before that cutoff point.
“The board of Rightmove has fully reviewed the latest proposal with its financial and legal advisers,” it said. “The board has concluded that the latest proposal remains unattractive and continues to materially undervalue Rightmove and its future prospects and that the board cannot recommend the latest proposal to Rightmove shareholders.”
The cash and share offer values each Rightmove share at 780p, and the entire company, which is listed on the FTSE 100 share index, at about £6.2bn. REA made the proposal on Friday, after its previous three offers were also rejected..
Shares in Rightmove fell by 3% in early trading, to 648p.
REA has accused Rightmove’s board of failing to engage with its offers but the criticism was rejected in Monday morning’s statement. The board said its chair, Andrew Fisher, had met Hamish McLennan, chair of REA, in person to discuss the fourth offer.
“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,” it said.
Rightmove has also refused to accede to REA’s request for an extension to the “put up or shut up” deadline.
“The last few weeks have been very disruptive, as well as unsettling for our colleagues,” said Fisher. “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 ‘[put up or shut up]’ deadline such that we can bring certainty to this process.”
Rightmove is also declining to allow the Australian firm access to “due diligence information” so it could consider a potential fifth proposal.
“The board considers that the considerable information on Rightmove’s business, strategy and financial results in the public domain, existing knowledge of Rightmove within REA, and Rightmove’s numerous engagements with REA, should be sufficient for REA to put forward a proposal capable of recommendation, within the 28-day period set out under the UK takeover code,” Rightmove tells shareholders.
“The put up or shut up framework is designed to protect offeree companies from being subjected to an unnecessarily prolonged period of uncertainty cause by an offer period.”
In 2001, Rupert Murdoch’s son Lachlan took control of REA, buying a 44% stake in the struggling Australian property company for A$2m (£1.3m). Since the Murdochs sold some of their media crown jewels and Rupert retired from leadership of the rest last year, the property company has taken on greater importance for News Corp.
The investment is seen as one of Lachlan’s main contributions to the family’s wealth.
Source: theguardian.com
