The Australian property portal REA Group, majority-owned by News Corp, has made a direct appeal to Rightmove shareholders following the rejection of its third takeover offer. This move comes as the September 30, 2024 deadline for a potential deal looms, with analysts suggesting it could be REA's final attempt to initiate negotiations.
REA's latest bid, valuing Rightmove at £6.1 billion or 770p per share, was dismissed by the UK property website's board. This offer surpassed previous proposals of 705p and nearly 750p per share, which valued Rightmove at £5.6 billion and £5.9 billion, respectively.
Rightmove's board concluded that the offer "materially undervalued" the company and its future prospects. In response, REA expressed frustration over the lack of engagement from Rightmove, urging shareholders to encourage the board to enter into constructive discussions.
REA Group, founded in 1995 and publicly listed since 1999, operates Australia's leading property website, realestate.com.au. The company has expanded its reach to Asian markets, including Malaysia and Hong Kong, and has diversified into mortgage brokerage through acquisitions like Mortgage Choice.
Rightmove, established in 2000 by four major UK estate agencies, has maintained a dominant position in the UK property portal market with over 90% market share. The platform receives more than 2 billion visits annually and serves over 20,000 estate agent and new homes developer customers.
The proposed merger would combine two complementary digital property businesses, potentially creating a global powerhouse in the sector. REA argues that Rightmove's share price has lacked "sustained upward momentum" for two years, despite buyback programs and strategy revisions.
Owen Wilson, CEO of REA, emphasized the benefits of the merger, stating:
"We live in a world of intensifying competition and this proposed transaction would bring together two highly complementary digital property businesses for investment and growth."
This pursuit aligns with News Corp's strategy to diversify beyond media, as Lachlan Murdoch prepares to take control of the company. The potential merger could leverage REA's international experience and Rightmove's strong UK presence to create a more competitive global entity.
As the situation unfolds, industry observers are closely watching for any signs of a possible hostile approach by REA. The outcome of this high-stakes negotiation could significantly impact the global property portal landscape and set a precedent for future consolidation in the digital real estate sector.