Rightmove PLC (GB:RMV) has turned down the third bid from Rupert Murdoch-owned REA Group (AU:REA) amid the ongoing acquisition saga. The company stated that the new and better offer from REA still undervalues Rightmove and is unattractive. Through this acquisition, REA Group intends to create a global, diversified digital property platform, solidifying its leading market positions in both Australia and the UK. Following the announcement, Rightmove shares fell 1.41% as of writing, while REA Group stock declined 0.70%.
Rightmove runs the UK’s largest property portal, rightmove.co.uk. Meanwhile, REA Group, primarily owned by the U.S.-based media giant News Corp. (NWSA), is a digital advertising firm that runs Australia’s top property and real estate websites.
Rightmove Rejects REA’s Offer Again
The latest proposal from REA Group includes 341p in cash and 0.0422 new REA shares, valuing Rightmove at an implied 770p per share. This bid follows an initial offer of 705p per share, or £5.6 billion, and a second offer of 749p per share, both of which were rejected by Rightmove.
As a result, REA Group expressed disappointment over the latest rejection, stating that the Rightmove board had refused to engage in any meaningful discussion about a potential deal.
Meanwhile, analyst Sean Kealy from Panmure Liberum believes the rejection shouldn’t be surprising to REA, as the latest bid values Rightmove similar to its nearest competitors. The latest offer also ignored the company’s potential growth opportunities and anticipated share re-ratings. Additionally, Kealy noted that the offer’s structure is excessively complicated.
Under UK takeover regulations, REA must either make a formal offer or withdraw from the deal by September 30.
Are Rightmove Shares a Good Buy?
On TipRanks, RMV stock has been assigned a Moderate Buy rating based on 11 recommendations, including six Buys. The Rightmove share price target of 646.50p is 3.7% below the current trading price.
