Rightmove has rejected a third bid from Rupert Murdoch’s REA Group and said the offer was “unattractive” and undervalues the UK’s largest online property portal.
On Wednesday Rightmove confirmed that its board had “unanimously rejected” the non-binding cash-and-shares offer put forward on Monday, which valued the company at £6.1bn.
It is the third offer REA has made this month. Since the initial £5.6bn bid, disclosed on 5 September, the business has increased its offers, with the current one about £200m higher than the £5.9bn put forward on 20 September.
REA, which is majority-owned by Murdoch’s News Corp, said that the latest rejection was “disappointing” and that it was frustrated that the Rightmove board had refused any “substantive engagement” over a deal.
It now has until 30 September to make a revised offer, or be blocked from any further offers after that date.
REA has said the revised offer is worth 770p a share. However, Rightmove had said on Monday that the “implied value” had fallen to 761p, after falls in the REA share price. On Wednesday, it said that value had edged down, to 759p.
Rightmove has more than 1 million properties advertised each month. It raises cash by charging estate agents subscription fees to list properties, as well as selling other services.
Rightmove and Zoopla, the second-biggest company in the sector, are now facing stiffer competition after the US property company CoStar bought OnThe Market last October.
Responding to the deal on Wednesday, REA said it believed that the offer was “highly compelling” and gave shareholders immediate cash value as well as opportunities to benefit from future value creation. It encouraged Rightmove shareholders to engage with it over a potential offer but said there was “no certainty” a revised offer would be made.
Rightmove’s board has previously called REA’s attempts to buy it “wholly opportunistic”, and has told shareholders to stick with the company and not engage with REA.
In 2001 Rupert Murdoch’s son Lachlan bought the struggling Australian property company REA, taking a 44% stake for A$2m (£1.3m).
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Since Rupert Murdoch and his family sold some of their media crown jewels and the patriarch retired from leadership of the rest last year, the property company has taken on increasing importance in News Corp’s portfolio. The investment is seen as one of Lachlan’s key contributions to the Murdoch family’s wealth. Rupert is taking legal action to try to hand control of News Corp to Lachlan, who is thought to share his rightwing political views.
The company is now worth A$26bn and News Corp’s overall digital real-estate services division, which includes operations in the US, accounted for a third of total global profits of $1.5bn in the year to the end of June.
It owns a number of property websites in Australia including realestate.com.au, property.com.au and the data company Proptrack, as well as brands in India and the US. It previously tried to expand into the UK but sold that operation to Zoopla in 2009.