Rupert Murdoch launches fourth Rightmove bid worth £6.2bn

An Australian property giant owned by Rupert Murdoch was told last night it needs to offer at least £7billion for Rightmove to be in with a chance of a deal.

It came after Rea Group made a fourth bid for the British home listings giant, which valued the company at £6.2billion.

Rightmove said yesterday that it will consider the latest proposal, having already rejected three earlier bids worth £5.6billion, £5.9billion and £6.1billion.

And the FTSE 100 property website group did not grant Rea’s request to extend the bid deadline from 5pm on Monday.

Shares in Rightmove rose 0.5 per cent, or 3.6p, to 668.6p yesterday, still languishing below the 781p offer price in a sign that investors do not believe an agreement will be reached.

Rea said it was ‘disappointed’ that Rightmove’s board, led by chairman Andrew Fisher, had not yet engaged in takeover talks. The Melbourne-based group’s chief executive Owen Wilson flew to London yesterday in the hope of meeting Rightmove directors. He joined Rea chairman Hamish McLennan, who jetted in earlier this week to meet Rightmove shareholders. They will hold further talks with Rightmove shareholders over the weekend, urging them to pressure the firm’s board to engage.

‘Rea has repeatedly requested meetings with Rightmove but no meetings have taken place and as such there has been no substantive engagement beyond cursory procedural telephone calls with the Rightmove chairman,’ a Rea spokesman said.

Several investors including Axa have broken cover to say Rightmove directors should come to the table. But others said the property platform should hold its nerve.

‘The Rightmove board should be in no rush, if at all, to engage with Rea based on its slightly sweetened offer,’ a spokesman for Sanford DeLand Asset Management, which holds a £16m stake in the firm, told the Mail.

‘We do not share Rea’s logic that a combination will realise value given it has no existing operations in the UK.’

He said there was ‘zero appeal’ in ‘exchanging 100 per cent of what is a great British organic growth story for part cash and part paper in Rea which has been assembled largely through M&A’.

‘It would take nothing short of a knockout bid with full cash alternative to change our view,’ he added.

Peel Hunt analysts Jessica Pok and Melanie Yang said the new offer was ‘not strong enough’ and cast doubt on Rea’s ability to increase its bid further.

They said Rightmove is worth at least £7billion.

‘If Rightmove agrees to extend the deadline for a formal bid, it opens the possibility for Rea to increase its offer,’ they said.

‘However, we do not believe Rea can significantly increase the bid price.’

Dan Coatsworth, investment analyst at AJ Bell, said: ‘Rea doesn’t seem to get the message. To really get this deal over the line, Rea needs to consider an all-cash offer. Shareholders know they are holding a unique asset for the UK stock market and the UK market leader for property portals. They aren’t going to give that up unless Rea pays a premium price.’

Suggesting Rea would need to pay over 800p a share, he added: ‘It needs to dig a lot deeper or walk away.’

Rea offered 781p per Rightmove share, including a special dividend of 6p. It has committed to a secondary listing in London that would allow British investors to own Rightmove shares.

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