Rightmove Rejects REA Group’s ‘Opportunistic’ Takeover Proposal

Property portal giant Rightmove (LON: RMV) said Wednesday that it has firmly rejected a takeover proposal from Australian real estate firm REA Group, deeming it “wholly opportunistic and fundamentally undervalued.”

In a statement released today, Rightmove's board confirmed receiving an unsolicited, non-binding proposal from REA. The proposal, comprised of 305p in cash and 0.0381 new REA shares for each Rightmove share, valued Rightmove at 698p per share, representing a 26% premium to the company's undisturbed closing price.

However, Rightmove's board said that after careful consideration with its financial advisors, it concluded that it did not adequately reflect the company's future prospects and was significantly undervalued. As a result, the board unanimously rejected the proposal.

“The Board carefully considered the Proposal, together with its financial advisers, and concluded that it was wholly opportunistic and fundamentally undervalued Rightmove and its future prospects,” said Rightmove.

Rightmove shareholders were advised to take no action in response to the proposal, and the company said that there was no certainty that any offer would be made or the terms on which it might be made.

Rightmove, as a dominant player in the online property listings space, has consistently demonstrated strong performance and growth. REA said at the start of the month that it sees Rightmove as a strategic fit due to its strong market position and alignment in terms of business focus, innovation, and cultural values.

REA added that a potential acquisition is a “transformational opportunity” for both companies.