Rupert Murdoch walks away from $12 billion chase for property giant

Rupert Murdoch’s REA Group has abandoned its pursuit of Rightmove after its latest £6.2 billion ($12 billion) bid was rejected.

The Australian property business confirmed its withdrawal on Monday afternoon (UK time), just hours after the London-listed rival snubbed a fourth offer.

REA’s decision to end its pursuit, which it blamed on “limited engagement” with the board, led to shares in Rightmove falling by almost 9 per cent on the London Stock Exchange.

Rupert Murdoch has ended his pursuit of UK online property giant Rightmove.Credit: AP

Owen Wilson, chief executive of REA, said: “Against a backdrop of intensifying global competition, we approached Rightmove’s board because we strongly believed in the opportunity to create a globally diversified leader in the digital property sector that would benefit both REA and Rightmove shareholders.

“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.

“We are always financially disciplined when we look at M&A and reinvestment in our business and will continue to focus on the many other opportunities ahead of us.”

The news comes hours after Rightmove had unanimously rejected a £6.2 billion takeover offer REA, which coincided with Monday’s takeover deadline.

Rightmove said the latest proposal “remains unattractive and continues to materially undervalue Rightmove and its future prospects”.

The UK property portal added its shareholders would be “better served” through its standalone prospects and strategy.

It rejected the latest offer from REA after meetings took place between Andrew Fisher, Rightmove’s chairman, and Hamish McLennan, chairman of Murdoch’s group.

Murdoch’s News Corp has been seeking to diversify beyond media, with the patriarch’s eldest son Lachlan soon set to take control of the company.

Rightmove is by far the biggest of Britain’s three online property portals.Credit: Getty

Robert Thomson, chief executive of News Corp, said on Monday: “We applaud REA’s financial discipline as it is foolhardy to overpay for an asset, even if it patently had positive potential.

“Thanks to Lachlan Murdoch’s savvy investment in REA, digital property has become an important engine of growth at News Corp. We have no doubt that REA will continue to successfully expand into auspicious adjacencies and are excited by their progress in India, where the company is now the market leader and benefitting from the express economic growth in the world’s largest country.

“As for Rightmove, we wish them well in an increasingly competitive British market – unfortunately, the company’s Board did not make the right move.”

The £6.2 billion proposal marked REA’s fourth attempt at buying Rightmove and represented a significant premium to its market valuation of around £5 billion.

Rightmove has also rejected calls from REA to extend a so-called put-up-or-shut-up deadline at 5pm on Monday to make a final offer or walk away, saying that Murdoch’s group has “considerable information” to make an offer that could be recommended to shareholders.

Mr Fisher said: “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 PUSU deadline such that we can bring certainty to this process.”

REA previously expressed its frustration at a lack of engagement from Rightmove on its proposals.

Rightmove said it “has taken every phone call that REA has made since its interest was first made public”. The company added that its teams “have known one another for many years, and have had numerous interactions, including discussions around strategy and best practice as recently as June”.

Telegraph, London

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