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REA has withdrawn its possible offer for Rightmove after four bids were rejected by the property platform.
“The potential acquisition of Rightmove was dependent on coming to an agreement at a fair price, which would have required meaningful engagement and a constructive dialogue,” REA said.
REA’s chief executive Owen Wilson added that the company was “disappointed” with Rightmove’s limited engagement. “They had nothing to lose by engaging with us.”
Rightmove has rebuffed claims from Wilson that it has “refused to meet with” REA.
It said that the company has “taken every phone call that REA has made since its interest was first made public, with a level of engagement which in Rightmove’s view is customary and appropriate in the context of an unsolicited and unilateral series of approaches”.
Out of steam
The news comes after Rightmove called on Rupert Murdoch’s REA to submit a “best and final” offer for the firm today after rejecting a fourth £6.2bn bid and turning down a request for an extension to takeover talks.
After rebuffing REA’s third offer for “materially undervaluing” the company last week, London-listed Rightmove said the fourth £6.2bn offer “remains unattractive”.
“The board has unanimously concluded that the latest proposal is unattractive and materially undervalues Rightmove,” the company said. “Shareholder interests would be better served through the execution of Rightmove’s standalone strategic plan.”
Rightmove chair Andrew Fisher urged REA to “submit a best and final proposal ahead of today’s 5pm ‘put up or shut up’ deadline such that we can bring certainty to this process”. Fisher called the series of bids “very disruptive, as well as unsettling for our colleagues”.
“We respect REA and the success they have achieved in their domestic market. However, we remain confident in the standalone future of Rightmove,” he added.
REA had a final deadline of 5pm this evening to put forward a bid for the property portal. REA’s boss Owen Wilson said it “continues to see the potential for [REA] to strengthen Rightmove and accelerate its growth.”
Rightmove declined REA an extension to its 30 September ‘put up or shut up’ deadline, as well as access to due diligence as “none of REA’s proposals received to date has been at a sufficient level to grant such access”.
Was Rightmove right to reject the bids?
Analysts and commentators had been split over the potential deal, with some former detractors urging Rightmove to accept the recent higher bid.
Phil King, the chief investment officer of Regal Partners, which holds stakes in both Rightmove and REA, said last week: “In our view [Rightmove] don’t appreciate the upside to the REA share price if the deal is successful and the downside to the Rightmove share price if the offer is withdrawn.”
“I commend the Rightmove board for rejecting the initial lowball offers,” Doug Tynan, chief investment officer of GCQ told the Australian Financial Review after the fourth bid for Rightmove.
“However, the revised £7.70 proposal demonstrates the seriousness of REA’s intent and as a consequence, we are at the point where it is in shareholders’ interests for the board to engage with REA,” he added.