Rupert Murdoch’s REA Group may be gearing up for a hostile takeover of its UK rival, Rightmove PLC (LSE:RMV), after taking a firmer stance with its third bid. REA tabled a 770p cash and stock offer, expressing disappointment over Rightmove's lack of engagement.
US investment bank Jefferies noted the "firmer tone" from News Corp (NASDAQ:NWSA)-owned REA, suggesting the latest approach could be the "beginning of the end-game." Analysts believe a rejection from Rightmove could push REA towards a hostile bid. REA’s offer is 39% above Rightmove’s pre-bid valuation, with 341p in cash and the rest in REA stock, giving Rightmove investors 20% of the enlarged company.
Rightmove has said it will "carefully consider" the bid, but Peel Hunt analysts remain sceptical.
They point out that the offer is 6% below the five-year pre-pandemic average and 11% below the current European peer average. A dual listing in the UK and Australia may help, but Peel Hunt believes the offer still falls short.
Rightmove shares were up just 1% at 681.4p, below REA's offer price. REA now has until the end of the month to make a firm bid or walk away.