Rupert Murdoch’s REA have held talks with Rightmove’s shareholders in London in a bid to complete a £6.2bn takeover of the UK property portal ahead of today’s deadline.
REA, the Australian-based firm, have until 5pm today to make a firm offer for the FTSE 100-listed property portal or step away for six months – although an extension to the process may be requested.
Senior REA figures tried to persuade Rightmove shareholder to accept their cash-and-shares £6.2bn offer.
The UK property portal has rejected three previous non-binding cash and shares approaches from REA this month, calling them “unattractive” and saying the offers “fundamentally undervalue” the business.
In its latest offer, REA improved its cash and shares proposal with terms valuing each Rightmove share at 781p, and the entire company at about £6.2bn. Its initial proposed bid of 705p in early September had valued Rightmove at £5.6bn, before it made subsequent bids worth £5.9bn and £6.1bn.
REA’s latest approach means that for each share, Rightmove investors would receive 346p in cash and 0.0417 new REA shares and a special dividend of 6p in cash in lieu of any final dividend.
However, it has been reported that Rightmove shareholders want in the region of £7bn – all in cash.
If REA is successful in its bid for Rightmove it will almost certainly change the way properties are marketed for sale on the platform, although it is not clear precisely what impact that will have on estate agents and vendors at this stage.
REA in Australia charges sellers to advertise their properties, but also earns fees from estate agents for buyer lead introductions and other services.
“REA in Australia charges sellers to advertise their properties …”
Not sure whether this is correct – it sounds like homeowners can advertise with REA directly. That’s not the case.
On the realestate.com.au website it says “You must hold a registered real estate licence to advertise established property on realestate.com.au. Our minimum term of the contract is 12 months and we do not support one-off listings unless you have a subscription with realcommercial.com.au.”
What is the case though is that Aussie agents pass on 100% of the fee for portal advertisement onto the vendor as part of the “marketing package”. Not sure how paletable that would be to UK vendors.
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