With just hours left for a formal offer will REA, called overpriced and overpowerful, be coming over here?
Australians can pay more than anyone else in the world to list their properties – paying as much as £2000 for an inner-city property listing on realestate.com.au or its smaller competitor domain.com.au. Murdoch’s REA group, that has been in the headlines for trying to acquire Britain’s Rightmove to bring its Australian dominance and Mortgage Choice mortgage broking to the UK made revenues of around £750 million over the year to August, following price hikes of 13%.
Murdoch’s portal is seen as a world leader, with a cashflow per capita around 16 times more than that of the US site Zillow, and three times that of Rightmove, which is seen by some as its closest global rival. “They are just printing money,” Mike DelPrete, a US-based industry expert told The Guardian.
But the question now is, does Rightmove actually want to be bought? News is breaking that the Murdoch group’s latest offer has just been rejected by the Rightmove board who have told the Australian group to make their final and best offer before the 5.00 pm deadline that if missed, would see REA have to wait 6 months before trying again under stocke exchange rules.
“We’re into the final stretch in the race to buy Rightmove. REA has until 5pm today to make a formal offer, and it’s going to have to radically change the price and structure of the deal if it has any chance of winning over Rightmove’s board,” says Russ Mould from AJ Bell.
“Given that four proposals have been rejected, one would have thought REA had got the message by now that Rightmove shareholders want a whole lot more money. Normally by this point in the proceedings the suitor would accept defeat and retreat with its tail between its legs. Yet REA has shown a dogged determination to secure the prize so you cannot rule out one final attempt before the clock strikes five.
“A 3% decline in the share price in early trading on Monday implies some investors are banking profits while the stock remains elevated by the live bid situation. It also suggests that the market doesn’t believe REA will come back with anything good enough to win the deal, given how the price is trading below the latest rejected offer level.
“Rightmove could come out of this situation in a better position than pre-bid. The fierce takeover interest will have reminded the market there is something special about this company and that could draw in a new pool of investors.”
