News Corp's REA submits improved $8.1 billion bid for U.K.'s Rightmove

By Louis Goss

REA Group, the Australian property listings site controlled by Rupert Murdoch's News Corp, has put forward a third offer to acquire its British rival Rightmove in an improved bid that values the U.K.'s top online real estate agent at GBP6.1 billion ($8.1 billion).

The Melbourne property listings business on Monday said it had submitted a third bid to acquire Rightmove that would see it pay 770 pence per share, in what marks a 9.2% increase on the price it initially offered to pay at the start of the month via its Sept. 5 offer.

If accepted, REA Group's new offer would see it acquire Rightmove through a GBP6.1 billion cash and shares transaction, at a 43% premium on the British firm's average share price over the previous 12 months and a 39% premium on Rightmove's closing share price on Aug. 30.

Rightmove said it will consider the new bid "in due course."

"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," said its chair, Andrew Fisher, in a statement.

REA called on the Rightmove board to "engage" with its offer.

Rightmove (UK:RMV) shares, listed on the London Stock Exchange, increased 3% to 692 pence on Monday morning, having advanced by 21% in the year-to-date.

REA Group (AU:REA) shares, listed in Sydney, fell 3% on Monday, having gained 7% in 2024 so far.

The U.K. property seller previously rejected two separate offers put forward by REA Group including an initial offer to pay 705 pence per share, or GBP5.6 billion, on Sept 5. and an improved bid to pay 749 pence per share, or GBP5.9 billion, on Sept. 16.

In both cases, Rightmove's management dismissed REA Group's offers as "wholly opportunistic," while saying the Australian firm's bids undervalued its business and future prospects.

In a note, Peel Hunt analysts led by Jessica Pok said they believe REA Group's most recent offer is likely still "below what Rightmove's investors will find acceptable," as they argued the British firm's prospects will likely be boosted by an "improving U.K. housing market."

Rightmove's shares remain down by more than a quarter since their peak at in Dec. 2021, as the U.K.'s property market has suffered in the face of higher interest rates that have pushed up mortgage costs.

MarketWatch is owned by Dow Jones, a subsidiary of News Corp (NWS).

-Louis Goss

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09-23-24 0418ET