Rightmove suitor REA walks away from bid after £6.2bn approach rebuffed

Australian firm REA, which is majority-owned by the tycoon’s News Corp group, confirmed it will not make a firm offer for Rightmove, sending shares in the FTSE 100 listed property portal slumping by 7%.

REA hit out at Rightmove, saying it was “disappointed” with the level of engagement from the firm’s board.

It claimed this “impeded” its ability to make a bid ahead of Monday’s 5pm deadline to make a firm offer or walk away under City takeover rules.

Earlier on Monday, Rightmove revealed it had rebuffed a fourth cash-and-shares approach from REA on Friday worth 781p a share.

Rightmove said it believed the proposal remained “unattractive and continues to materially undervalue Rightmove and its future prospects”.

It had called on REA to put forward its “best and final proposal” ahead of the deadline and dismissed the request for an extension to end the uncertainty and “disruption” caused by the process.

REA chief executive Owen Wilson said: “Against a backdrop of intensifying global competition, we approached Rightmove’s board because we strongly believed in the opportunity to create a globally diversified leader in the digital property sector that would benefit both REA and Rightmove shareholders.

“We were disappointed with the limited engagement from Rightmove that impeded our ability to make a firm offer within the timetable available.

“They had nothing to lose by engaging with us.”

He added: “We are always financially disciplined when we look at M&A (mergers and acquisitions) and reinvestment in our business.”

REA had last week urged bosses at Rightmove to come to the negotiating table, criticising them for not agreeing to a meeting between the two parties.

Rightmove said its chairman, Andrew Fisher, had met his counterpart at REA, Hamish McLennan, following Friday’s proposed offer, with a further meeting also involving executives of both firms.

But REA said the chairman-to-chairman meeting was “introductory” and “high-level” only and argued that no other information was given in either meeting.

Rightmove said earlier on announcing its rejection of the approach that “nothing was presented in either meeting which materially changed the board’s view of the latest proposal”.

The FTSE 100 firm did not grant REA access to its books, arguing that “none of REA’s proposals received to date has been at a sufficient level to grant such access”.

“Without a compelling proposal, it would not be appropriate or in the best interests of Rightmove or its shareholders to provide confidential and commercially sensitive information to REA,” it added.

It said the decision to reject the fourth proposal came after consultation with its shareholders.

“The board has concluded that shareholder interests would be better served through the execution of Rightmove’s standalone strategic plan,” the firm said.

It said that REA had, in the meetings held following Friday’s approach, requested an extension to the so-called put up or shut up (Pusu) deadline on September 30 so it could consider a fifth proposal.

But Rightmove said the deadline was “designed to protect offeree companies from being subjected to an unnecessarily prolonged period of uncertainty cause by an offer period”.

Ahead of REA’s move to walk away from a bid, Rightmove chairman Mr Fisher said: “The last few weeks have been very disruptive, as well as unsettling for our colleagues.

“To the extent REA wants to put forward a further proposal, I urge them to submit a best and final proposal ahead of today’s 5pm Pusu deadline such that we can bring certainty to this process.”

Rightmove is the UK’s largest online real estate portal, while REA is Australia’s largest property website.

Founded in a garage in Melbourne in 1995, REA has expanded its operations throughout the country, while it also has businesses in India and south-east Asia.

It is valued at about 27 billion Australia dollars (£13.9 billion) on Australia’s stock market and employs around 3,400 staff.