REA Group, majority-owned by News Corp, has made a third takeover bid for Rightmove, valuing the UK's largest property portal at £6.1 billion. This latest offer, at 770p per share, represents an increase from previous proposals of 705p and 750p per share.
Rightmove, founded in 2000 by four major UK estate agencies, has agreed to "carefully consider" the new proposal. This marks a shift from its previous stance, having rejected earlier offers as "opportunistic". The company's board, led by chairman Andrew Fisher, emphasized Rightmove's strong market position and growth prospects.
"Rightmove is an exceptional company with a very clear strategy, a consistent track record of delivery and a strong management team. The board is confident in the company's short and long-term prospects, and sees a long runway for continued shareholder value creation."
This potential merger aligns with News Corp's strategy to diversify beyond media, particularly as Rupert Murdoch transitions leadership to his son, Lachlan. News Corp acquired a majority stake in REA Group in 2000, recognizing the growing importance of digital property services.
REA Group, established in 1995 in Melbourne, operates Australia's leading property website, realestate.com.au. The company has expanded its operations globally, investing in data analytics and artificial intelligence to enhance its services. Similarly, Rightmove has over 1 million property listings and has seen its market capitalization exceed £5 billion in recent years.
The proposed merger would create one of the world's largest digital property businesses, combining Rightmove's dominant UK presence with REA Group's international portfolio. This consolidation comes as the property market increasingly shifts online, a trend accelerated by the COVID-19 pandemic.
Owen Wilson, REA's chief executive, expressed disappointment at Rightmove's lack of engagement, 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."
The UK property market has faced challenges due to economic uncertainties and Brexit, making digital platforms increasingly crucial for buyers, sellers, and estate agents. Both Rightmove and REA Group have adapted their revenue models, focusing on subscriptions from estate agents and property developers.
As the digital transformation of the property sector continues, this potential merger could reshape the global real estate landscape. Investors have responded positively, with Rightmove's shares rising 2.8% following the announcement of the third offer.
The outcome of this bid remains uncertain, but it underscores the growing importance of digital platforms in the property market and the ongoing consolidation in the tech sector. As both companies continue to invest in innovative technologies, the potential combined entity could be well-positioned to lead the next phase of digital property services globally.