Rightmove has rejected the latest offer from REA Group (made Friday) and told the Rupert Murdoch backed company that it needs to up its offer by the end of the day – the put up or shut up deadline.
Under the terms of the Latest Proposal, shareholders of Rightmove would receive, for each Rightmove share 346 pence in cash and 0.0417 new REA shares, which implies an offer value of 780 pence based on the closing price of REA on 30 September 2024.
They would also receive a dividend of 6 pence in cash (in lieu of any final dividend for the year ending 31 December 2024 to which Rightmove shareholders would ordinarily be entitled).
The Latest Proposal adds 5p in cash (excluding the dividend referred to above) and 5p in REA shares, implying an additional 10p in value (or 1.3%) when compared to the third proposal recently made by REA. The third proposal was rejected by the Rightmove Board on 24 September 2024, on the basis that it materially undervalued Rightmove and its future prospects.
UNATTRACTIVE
In a statement to the City this morning Rightmove said: “The Board has concluded that the Latest Proposal remains unattractive and continues to materially undervalue Rightmove and its future prospects and that the Board cannot recommend the Latest Proposal to Rightmove shareholders. Accordingly, the Board has unanimously rejected the Latest Proposal.”
And it adds: “The Board has unanimously concluded that the Latest Proposal is unattractive and materially undervalues Rightmove. The Board has concluded that shareholder interests would be better served through the execution of Rightmove’s standalone strategic plan, with the multiple paths for long-term value creation which were laid out at the Capital Markets Day in November 2023.”
LEADING OPERATOR
Andrew Fisher, RightmoveAndrew Fisher, Rightmove Chair, says: “We respect REA and the success they have achieved in their domestic market. However, we remain confident in the standalone future of Rightmove. Rightmove has been the leading operator in the UK for over 20 years, and it has differentiated market presence, branding and technology, and very significant opportunities for future growth.
“The last few weeks have been very disruptive, as well as unsettling for our colleagues. To the extent REA wants to put forward a further proposal, I urge them to submit a best and final proposal ahead of today’s 5pm PUSU deadline such that we can bring certainty to this process.
“Our world-class team is executing against our strategic plan, and continuing to drive innovation and accelerate growth to deliver compelling shareholder value.”
