Australian property listings giant REA Group has increased its takeover offer for British rival Rightmove to £6.1 billion, marking its third attempt to acquire the UK's largest online property portal.
REA Group, which is majority-owned by Rupert Murdoch's News Corp, announced on Monday that it had made a "further improved proposal" valuing Rightmove at 770 pence per share. This latest bid represents a £200 million increase from its previous offer of £5.9 billion, which was rejected by Rightmove last week.
The new offer consists of 341 pence in cash and 0.0422 new REA shares for each Rightmove share. If accepted, Rightmove shareholders would end up owning about a fifth of the combined company.
Owen Wilson, chief executive officer of REA Group, expressed frustration at the lack of engagement from Rightmove's board. "We are genuinely disappointed at the lack of engagement by Rightmove's board," Wilson said. He added, "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."
Rightmove, which dominates the UK's online property market, has been resistant to REA's advances. Andrew Fisher, chairperson of Rightmove, stated that the company had rejected the previous two proposals, describing them as "uncertain, highly opportunistic and unattractive." Fisher said the board would "respond to the most recent proposal in due course."
The takeover bid comes at a time when Rightmove faces increasing competition in the UK market. US property company CoStar recently acquired OnTheMarket, a portal created by some of the largest estate agents to challenge Rightmove's dominance.
REA Group, valued at A$25 billion (£12.8 billion), owns several property websites in Australia, India, and the United States. The company has previously attempted to expand into the UK market but sold its operation to Zoopla in 2009.
The Murdoch family's investment in REA, which began in 2001, has become increasingly important to News Corp's portfolio. The property company is now valued higher than News Corp itself, prompting activist investor Starboard Value to pressure News Corp last year to sell REA to realise its value.
REA has until 30 September to make a formal offer or walk away from the bid under UK takeover rules. The company has said it would seek a secondary listing in London if the deal progresses, giving it access to a wider pool of investors.
Rightmove's shares rose nearly 2 per cent to 687 pence in early trading on Monday, reflecting investor interest in the potential takeover.
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