REA Group’s Latest Bid for Rightmove

By Scott Murdoch and Himanshi Akhand

(Reuters) – Australian property listing firm REA Group has made a third pitch to buy British rival Rightmove (OTC:RTMVY) with a new £6.1 billion ($8.12 billion) offer on Monday after its two previous offers were rejected.

The latest offer consists of 341 pence in cash and 0.0422 new REA shares, giving Rightmove an implied value of 770 pence per share.

Shares of REA, which is 62% owned by Rupert Murdoch’s News Corp (NASDAQ:NWSA), dropped 1.52% on Monday.

Rightmove did not immediately respond to a request for comment on the new non-binding bid outside normal UK business hours.

The REA offer put forward on Monday is higher than the initial offer of 705 pence per share, or £5.6 billion, and the second proposal of 749 pence per share. Rightmove had rejected both offers, stating they undervalued the company.

REA stated it had not had any “substantive engagement” with Rightmove, aside from the rejections, and that it remained ready to engage immediately with the Rightmove board.

“We are genuinely disappointed at the lack of engagement by Rightmove’s board and we strongly encourage the Rightmove board to engage,” REA CEO Owen Wilson said in a statement.

Britain’s housing market is triple the size of Australia’s, according to analysts, and a deal would allow REA to expedite its international growth plans.

“The increased offer is clearly aimed at bringing the Rightmove board to the negotiating table,” said S&P analyst Entcho Raykovski, noting that News Corp’s REA ownership would be reduced to about 49% if a deal progresses.

“…we note that REA has not declared the offer as best and final, so there is scope for further increases.”

The Australian company reiterated that it would look to apply for a secondary listing in London to access a wider pool of investors.

($1 = 0.7510 pounds)