Australia’s REA Group, which is backed by Rupert Murdoch, is set to increase its bid for Rightmove.
After the UK property portal formally rejected REA’s £5.6bn bid last week, REA executives are considering making a higher second offer, The Mail on Sunday reported.
The Australian company had offered to pay a total of 705 pence per Rightmove share, representing a premium of 27% to the British company’s closing price of 556 pence on 30 August, after which REA confirmed discussions.
“The board carefully considered the proposal… and concluded that it was wholly opportunistic and fundamentally undervalued Rightmove and its future prospects,” Rightmove said in a statement, after the board unanimously rejected the proposal.
Analysts have said that a deal closer to £6bn was needed to win over Rightmove.
Peel Hunt analysts said the offer “would need to be substantially sweetened to get [it] over the line.”
Earlier this week, Jefferies upgraded its rating for the UK property portal ‘underperform’ to ‘hold’, citing a “meaningful likelihood” that REA will follow through with an improved bid.
Analysts at Panmure Liberum, however, disagreed, and said that a deal looks “unlikely to come” as it questioned REA’s ability to pay a premium for the property portal.