Rightmove has rejected a fourth takeover bid from Rupert Murdoch's REA Group, which now values the UK online property firm at £6.2 billion.
REA, which is majority-owned by Murdoch's News Corp, tabled the offer on Friday, putting forward a cash-and-shares deal worth 775p a share based on the close of trading at the end of last week.
The latest rejection comes after Rightmove turned down a £6.1 billion bid from REA, last Wednesday, which Rightmove said "fundamentally undervalued" the company.
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REA has until 5pm today (30 September) to make a firm offer or walk away under City Takeover Panel rules. REA on Friday asked Rightmove’s board to permit an extension of the deadline and engage in talks with REA.
But the Rightmove board has also rejected this request.
"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," Rightmove said in a stock market update.
Andrew Fisher, chairman of Rightmove, added: "We respect REA and the success they have achieved in their domestic market.
"However, we remain confident in the standalone future of Rightmove. Rightmove has been the leading operator in the UK for over 20 years, and it has differentiated market presence, branding and technology, and very significant opportunities for future growth.
"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 deadline such that we can bring certainty to this process."
Owen Wilson, chief executive of REA, added: "While the Rightmove board has refused to meet with us, we have enjoyed the opportunity to connect with Rightmove shareholders and to share our vision for the combination.”
When news of a possible takeover attempt first broke on 2 September, it caused Rightmove’s shares to soar by more than 20% on the day.
At the time REA said it was “considering a possible cash and share offer” for the company because it believed there were “clear similarities between REA and Rightmove in terms of their leading market positions in the core residential business”.
Rightmove: what would a takeover mean for investors?
“REA moving on Rightmove amounts to a highly opportunistic bid,” says Russ Mould, investment director at AJ Bell.
“The target’s share price has been weighed down by investor worries about a lacklustre property market and a new competitive threat after US property giant CoStar struck a deal to expand into the UK,” he adds.
CoStar bought UK property website OnTheMarket last year, putting pressure on Rightmove as it seeks to retain its reputation as the number-one platform for people looking to buy, sell, or rent a house.
Rightmove’s share price has been broadly flat since the UK property market’s downturn at the end of 2022, meaning many investors will have lost out when the effects of inflation are taken into consideration.
What is more, the company has not benefited from the rally seen in the broader UK stock market so far this year. Before news of the possible takeover attempt broke on September 2, Rightmove's shares were down around 0.3% year-to-date. Meanwhile, the FTSE 100 was up more than 8% over the same period.
Despite this, shareholders are unlikely to accept a potential takeover attempt without a decent offer being made – particularly now that the outlook for the UK property market is improving.
Mortgage rates have been coming down for the past few months, and have fallen further since the Bank of England’s first interest rate cut on 1 August. While affordability challenges remain, the latest data suggests buyers are starting to return to the market.
An uptick in property market activity would spell good news for Rightmove, which makes money from estate agents advertising properties on its portal.
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