REA Group, the Australian property business backed by the Murdoch family, has elevated its bid for Britain's Rightmove to nearly £5.9 billion. This revised offer, reported by the Financial Times, represents a 7% increase from the initial proposal rejected earlier this month.
The enhanced bid, now approaching 750p per share, underscores News Corp's strategy to expand beyond its traditional media holdings. This move coincides with the transition of leadership from patriarch Rupert Murdoch to his eldest son, Lachlan Murdoch.
Rightmove, the UK's premier online real estate portal established in 2000, previously dismissed the initial approach as "opportunistic". Some investors have expressed concerns about the offer's structure, which combines cash and shares in the merged entity.
Iain McCombie, a fund manager at Baillie Gifford, stated:
"Rightmove is the cheapest property portal in the world by a margin. REA Group noticed that and made a bid. We're not going to sell that cheaply because it is a unique business and has a dominance there in this market"
Analyst Sean Kealy from Panmure Liberum suggested that a successful acquisition might require a premium of 60%, potentially valuing Rightmove at £7.1 billion.
REA Group, with a market value of A$26 billion (£13 billion), owns several property brands, including realestate.com. Founded in 1995, it became part of the Murdoch empire when News Corp acquired a controlling stake in 2005.
This bid follows News Corp's unsuccessful attempt to divest its US real estate business, Move Inc., in a deal reportedly worth $3 billion. The failed transaction prompted activist investor Starboard Value to advocate for REA's spin-off from News Corp.
The ongoing pursuit of Rightmove occurs against a backdrop of family dynamics within the Murdoch empire. Rupert Murdoch, at 93, is seeking to modify a trust to grant sole control to Lachlan. This move has sparked opposition from his other children, leading to a private legal battle in Nevada.
As the September 30 deadline for a firm offer approaches, the outcome of this high-stakes property portal acquisition remains uncertain, potentially reshaping the landscape of online real estate services across continents.