A Rightmove shareholder has opposed Rupert Murdoch’s takeover offer after City analysts said the media mogul would have to pay more than £7bn for the online estate agent.
REA Group, the Australian real estate giant owned by Mr Murdoch’s News Corp, last week tabled an indicative cash and share bid for Rightmove worth 705p per share, reflecting a 27pc premium on the London-listed company’s valuation.
However, Rightmove’s board unanimously rebuffed the offer, branding it “opportunistic”.
In a statement to investors, it said: “The board carefully considered the proposal, together with its financial advisers, and concluded that it was wholly opportunistic and fundamentally undervalued Rightmove and its future prospects.”
Sanford DeLand Asset Management, which holds 2.5m shares in Rightmove, raised concerns about the nature of the offer and said the board was right to reject it.
It said: “REA is not a company we follow, but we can see immediately it is a lower-quality business.
“Why would we wish to exchange 100pc of what is arguably the highest quality business listed on the UK market for [approximately] 40pc cash and 60pc in the paper of something inferior? In our view the bid is unlikely to be successful.”
Analysts said REA was looking to capitalise on Rightmove’s low valuation, claiming that Mr Murdoch would need to raise his offer considerably.
REA’s bid highlights efforts by the Murdoch family to diversify away from its traditional media business as patriarch Rupert hands over the reins to his eldest son, Lachlan.