Britain's Rightmove Spurns $7.3 Billion Takeover Bid from REA Group
Australian property listing firm REA Group's $7.32 billion cash-and-stock takeover offer rejected by Britain's largest real estate portal Rightmove
Real EstateProperty ListingsTakeover BidRea GroupRightmoveReal EstateSep 11, 2024
REA, which is 62% owned by Rupert Murdoch's News Corp, did not cite any reason for the offer's rejection by Rightmove. REA shares dropped 1.25% in early trade on Wednesday.
Britain's housing market is considered triple the size of Australia's, according to Jefferies analysts, and a deal would have allowed REA to expedite growth in lucrative international markets.
The Australian company had offered to pay a total of 705 pence per Rightmove share, representing a premium of 27% to the British company's closing price of 556 pence on Aug. 30, after which REA confirmed discussions.
The offer consisted of 305 pence in cash and 0.0381 new REA shares and was non-binding and subject to due diligence. REA said had a deal been completed, Rightmove shareholders would have owned about 18.6% of the combined group.
The cash component of the deal was due to be funded by debt and existing cash, REA said. Analysts estimated REA would need to issue about 30 million new shares for the stock portion of the deal, which could lower News Corp's holding down to about 50% of REA.
Frequently Asked Questions
Why did Rightmove reject REA Group's takeover bid?
Rightmove did not cite any reason for the offer's rejection.
What was the value of REA Group's takeover bid?
$7.32 billion
Who is the largest shareholder of REA Group?
News Corp, owned by Rupert Murdoch
What would have been the impact of the deal on News Corp's holding in REA Group?
News Corp's holding would have been lowered to about 50% of REA Group
What are REA Group's options now that the deal has been rejected?
REA Group can present the offer directly to Rightmove shareholders without board endorsement or sweeten the deal by increasing the cash component
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