Rupert Murdoch's Australian property firm REA Group Ltd. has terminated its $8.1 billion bid to acquire Britain's Rightmove PLC after the UK-based property portal rejected a fourth takeover proposal. The decision brings an end to a month-long negotiation marked by valuation disagreements and limited engagement between the two companies.
Rightmove's shares fell more than 8% to 614.40 pence in London trading on Monday, erasing gains made since the initial bid was made public on September 2. The London-listed company's stock had rallied approximately 20% during the takeover speculation.
"The lack of meaningful engagement and the consistent lack of information provided by Rightmove impeded the ability to progress discussions and work together towards a recommended transaction within the timetable permitted," REA Group said in a statement.
REA Group, which is 62% owned by Murdoch's News Corp, expressed disappointment over Rightmove's unwillingness to grant due diligence access or extend the deadline for a formal offer. "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," REA's CEO Owen Wilson stated.
Earlier on Monday, Rightmove announced it had unanimously rejected REA's fourth proposal, asserting that it "materially undervalued Rightmove and its future prospects." The company added that shareholder interests would be better served through the execution of its standalone strategic plan. "The last few weeks have been very disruptive, as well as unsettling for our colleagues," said Rightmove Chair Andrew Fisher.
REA's final offer comprised 346 pence in cash, 0.0417 new REA shares, and a special dividend of 6 pence in cash, implying a total value of 781 pence per Rightmove share-about a 3% increase over the previous bid. Analysts at J.P. Morgan had suggested that an offer between 800 pence and 850 pence per share would have been necessary to secure the deal.
"The lack of meaningful engagement from Rightmove made it challenging to move forward," REA Group noted. Despite the setback, the company remains optimistic about its growth prospects. "REA is excited to pursue its many other avenues for growth," the firm said.
Rightmove, a dominant player in the UK's online property market, has faced increased competition from rivals like OnTheMarket, which was acquired by American property firm CoStar Group Inc. earlier this year. The UK company appears poised for a steady recovery from the recent property market downturn, bolstered by the potential for more interest rate cuts that could boost housing sector sentiment.
REA Group operates a portfolio of property websites in Australia, India, and the United States. The company's previous foray into the UK market ended in 2009 when it sold its real estate site, PropertyFinder Group, to Rightmove's competitor Zoopla during the global financial crisis.
Before confirming its withdrawal, REA had requested an extension of the deadline to make a formal offer, which Rightmove declined. "But REA is excited to pursue its many other avenues for growth," the Australian firm reiterated.
