REA, a property group controlled by Rupert Murdoch’s News Corporation, has increased its proposed offer for Rightmove, the UK’s largest online property portal, to £5.9bn. This offer comes after the initial proposal was rejected by Rightmove’s board as undervaluing the company. The new offer values Rightmove at about 750p per share.
Rightmove urged shareholders to stick with the company and not engage with REA, calling the initial offer opportunistic. However, since news of the takeover interest, Rightmove’s market value has surged to almost £5.5bn.
REA has until the end of the month to make a formal offer for Rightmove under UK takeover rules. Analysts have noted that Rightmove is the cheapest publicly listed classifieds business in Europe, making it an attractive target for acquisition.
The UK online property market has seen increased merger and acquisition activity in recent years, with CoStar acquiring OnTheMarket and Silver Lake acquiring Zoopla. REA’s interest in Rightmove is part of its strategy to create a global digital property company.
Founded in 2001, REA was initially acquired by Lachlan Murdoch and has since grown to a value of A$26bn. News Corp’s digital real estate services division, which includes operations in the US, accounted for a third of the company’s total global profits in the last fiscal year.
The Financial Times first reported the news of REA’s increased offer for Rightmove.
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