The offer valued Rightmove at 775 pence per share
REA Group has withdrawn its offer for Rightmove after the UK property platform rejected its fourth non-binding proposal.
The offer was made on September 27, valuing Rightmove at 775 pence per share, a 45% premium on its 12-month and 24-month average share prices. However, Rightmove's board showed minimal engagement, forcing REA to pull out in accordance with Rule 2.8 of the Takeover Code.
The group approached Rightmove with a strategic rationale of creating a global digital property company by combining its Australian leadership with Rightmove's UK market. The only substantive interactions were two meetings between their chairmen on September 28 and 29, with no detailed presentation or further information from Rightmove.
Owen Wilson, CEO of REA, commented on the withdrawal.
“Against a backdrop of intensifying global competition, we approached Rightmove’s board because we strongly believed in the opportunity to create a globally diversified leader in the digital property sector that would benefit both REA and Rightmove shareholders,” Wilson said.
“We were disappointed with the limited engagement from Rightmove that impeded our ability to make a firm offer within the timetable available. They had nothing to lose by engaging with us.”
Wilson also emphasized REA’s disciplined approach to mergers and acquisitions.
“We are always financially disciplined when we look at M&A and reinvestment in our business and will continue to focus on the many other opportunities ahead of us,” he said.
“Our recent investment in Athena Home Loans is a great example of this. We have a clear strategy to expand in our core business and adjacent markets, and India represents an exceptional opportunity for growth.
“We look forward to pursuing these opportunities and generating further value for REA shareholders.”
Rightmove has struggled to generate sustained upward momentum in its share price over the past two years, despite buyback programs and strategic adjustments.
The deal would have allowed the company shareholders to benefit from REA's operations while offering value certainty in the market.
REA is still optimistic about its growth potential due to recent financial results, including a 27% increase in EBITDA. The company is looking to explore other ways to expand while continuing to deliver value to its shareholders.
