Rupert Murdoch is edging closer to a takeover of Rightmove – though a higher offer may be needed to secure the deal.
Australian property firm Rea Group, which is majority-owned by the media tycoon’s News Corp, has tabled a third offer, worth £6.1billion, for the property website.
Rightmove said it will ‘carefully consider’ the proposal having rejected two earlier bids worth £5.6billion and £5.9billion.
The latest offer values the British business’s shares at 770p each, around 9 per cent higher than the first 705p approach at the start of the month.
Property deal: Australian property firm Rea Group, which is majority-owned by Rupert Murdoch’s company News Corp, has tabled a third offer for Rightmove worth £6.1bn
But analysts said Rea may have to raise its offer again to get a deal over the line.
Russ Mould, investment director at broker AJ Bell, said: ‘The fact Rightmove says it will carefully consider the latest proposal implies it isn’t completely cold to the prospect of a takeover, knowing that it has to act in shareholders’ best interests.
However, it feels like the company will still push for more. Rightmove digging in its heels and refusing to be bought on the cheap would also show that UK plc isn’t for sale at any price.’
Rea yesterday criticised Rightmove for refusing to come to the table for talks.
Chief executive Owen Wilson said he was ‘genuinely disappointed at the lack of engagement’ from the takeover target’s board.
But in a sign this could change, London-listed Rightmove said it was considering the latest proposal, suggesting it is not totally opposed to a deal at the right price.
The takeover interest comes as the UK housing market starts to recover from a period of weaker demand due to high mortgage costs. That is expected to boost Rightmove’s shares and profits.
Rightmove’s stock rose 0.8 per cent, or 5.2p, to 679.6p yesterday but remained below the latest offer price, suggesting that shareholders are not convinced by the fresh bid.
Mould said: ‘This looks like a serious pursuit, albeit one where the bidder’s idea of fair value still doesn’t align with shareholders’ expectations.’
The property website group’s chairman Andrew Fisher said: ‘Rightmove is an exceptional company with a very clear strategy, a consistent track record of delivery and a strong management team.
‘The board is confident in the company’s short- and long-term prospects. The board will continue to act on behalf of our shareholders and respond to the most recent proposal in due course.’ Rea has until the end of the month to make a formal offer or walk away.
Analysts at Jefferies said that the tone in Rea’s announcements ‘has changed, becoming more firm’.
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