Rightmove has rejected a £5.6bn takeover approach from Rupert Murdoch-backed REA Group labelling it as “wholly opportunistic.”

The Australian property brand, 62%-owned by Murdoch’s News Corp company, confirmed yesterday that it had made a total offer worth 705p for each Rightmove share – made up of 305p in cash and 0.0381 new REA shares for each ordinary share.

Rightmove said its board carefully considered the offer but decided it “fundamentally undervalued” the property website and its future prospects.

REA had said the terms of the proposal  represent:

·      a 27% premium to Rightmove’s undisturbed share price of 556 pence on 30 August 2024 (being the last business day prior to the date of REA’s possible offer announcement on 2 September 2024); 

·      a 29 % premium to the Rightmove’s 6-month volume weighted average share price of 548 pence;

·      a 31% premium to the Rightmove’s 12-month volume weighted average share price of 540 pence; and

·      an enterprise value multiple of approximately 20.5x Rightmove’s EBITDA for the twelve months ended 30 June 2024 of £272 million.

It said: “Under the terms of the proposal, Rightmove shareholders would hold approximately 18.6 per cent. of the combined group’s issued share capital following completion of the proposed transaction. The cash component of the Proposal is expected to be funded through third party debt and existing cash resources. Given the strong growth and high cash generation of both REA and Rightmove, REA expects the enlarged group will be able to rapidly delever, consistent with REA’s track record.”

It is unclear if REA will make a new offer.