REA urges Rightmove board to engage with it over fourth offer

27th Sep 2024 11:12

(Sharecast News) - REA Group urged the board of Rightmove to engage with it on Friday, as it made a fourth non-binding proposal to acquire the company, valuing it at £6.2bn.

The proposal from the ASX-listed Australian firm, majority-owned by Rupert Murdoch's News Corp, offered Rightmove shareholders 346p in cash and 0.0417 new REA shares per share, along with a special dividend of 6p , representing a total offer of 781p per share based on REA's latest share price.

That reflected a 45% premium to Rightmove's 12-month volume-weighted average price (VWAP).

The proposal followed three previous offers from REA, all of which were rejected by Rightmove's board.

REA said it was disappointed by the lack of engagement from Rightmove, urging shareholders to direct the board to enter discussions before the 30 September deadline under the UK Takeover Code.

The fourth proposal was an 11% increase from REA's initial offer in early September, and included a 15% rise in the cash component.

REA argued that the offer provided a compelling premium and significant value to Rightmove shareholders, who would hold 20% of the combined entity post-transaction.

The proposal also included a mix-and-match facility, allowing shareholders to adjust the cash and share proportions of their consideration.

REA said the transaction would be financed through long-term debt and existing cash reserves.

The combined group would aim to deleverage to a target leverage ratio of less than 3x within 18 months post-completion.

"While the Rightmove board has refused to meet with us, we have enjoyed the opportunity to connect with Rightmove shareholders and to share our vision for the combination of the number one digital property businesses in the UK and Australia," said REA Group chief executive officer Owen Wilson.

"We continue to see the potential for us to strengthen Rightmove and accelerate its growth.

"This is a compelling opportunity to create a true global technology leader on the London market via a secondary listing, operating in two of the most attractive markets in the world."

Wilson said REA had further improved its offer, announcing on Friday that it intended to include a mix-and-match facility for shareholders who wanted to receive a greater proportion of their consideration in REA shares to do so.

"We believe it is in the interests of Rightmove shareholders for the Rightmove board to engage with us and to extend the 30 September deadline."

At 1051 BST, shares in Rightmove were down 1.23% at 656.8p.

Reporting by Josh White for Sharecast.com.