Australia’s REA increases takeover approach for Rightmove to £6.1bn

It comes after REA first tabled a possible offer in early September, valuing Rightmove at £5.6bn, but its advances have so far been rejected by the London-listed firm.

Owen Wilson, chief executive of REA, said: “We live in a world of intensifying competition and this proposed transaction would bring together two highly complementary digital property businesses for investment and growth.”

He added that the cash-and-shares proposal “provides a combination of immediate value certainty in cash and at the same time gives Rightmove shareholders an increasing opportunity in core digital property and adjacencies where we have much expertise”.

“We are genuinely disappointed at the lack of engagement by Rightmove’s board and we strongly encourage the Rightmove board to engage,” he added.

Rightmove said the initial 705p-a-share approach on September 5 “fundamentally undervalued” the firm and was “wholly opportunistic”.

Its suitor then increased the proposal to 749p a share on September 16, before the latest move on Sunday.

REA said that aside from having the approaches rejected, it has had “no substantive engagement with Rightmove”.

“REA is announcing the terms of the further improved proposal to provide shareholders of both companies with the opportunity to make their views known… and to urge Rightmove shareholders to encourage the board of directors of Rightmove to engage in constructive discussions with REA to work towards a recommended transaction,” REA said.

Under the terms of the third approach, Rightmove investors would own around 20 per cent of the enlarged group.

REA’s proposal would see the combined group apply for a secondary listing in London following the takeover, with its shares traded both on the London Stock Exchange and the Australian Securities Exchange. REA has until 5pm on September 30 to make a firm offer or walk away under City Takeover Panel rules.

Rightmove said it would “carefully consider” the latest proposal from REA.

While not giving its verdict on the approach, Andrew Fisher, chair of Rightmove, said the previous two proposals were “uncertain, highly opportunistic and unattractive”.

“Accordingly, the board unanimously rejected them.

“The board will continue to act on behalf of our shareholders and respond to the most recent proposal in due course,” he added.