REA Group sweetens Rightmove for third time to £6.2bn as it chases British portal

The Australian digital advertising company has sweetened its offer for British property portal Rightmove for a third time, to just over $12bn.

REA Group is keen to engage with Rightmove directors in its bid to create a digital property giant. Picture: iStock

Digital advertising company REA Group has sweetened its offer for British property portal Rightmove for a third time to about £6.2bn ($12.03bn).

The move signals its determination to open talks with the British group, which has come under pressure from shareholders to engage with the Australian suitor’s proposal after three knock-backs.

REA unveiled its latest proposal on Friday evening and reiterated its surprise at the repeated rejections of its prior proposals by the British company’s board.

The Australian company is majority-owned by News Corporation, publisher of The Weekend Australian

REA urged Rightmove shareholders to “use what little time remains” ahead of an upcoming deadline on September 30 to “make their views known to the Board of Directors of Rightmove”.

“REA believes it is in Rightmove shareholders’ interests for the Board of Directors of Rightmove to engage in constructive discussions with REA to work towards a recommended transaction,” it said.

The suitor said it had repeatedly requested meetings with Rightmove but none had taken place and “as such there has been no substantive engagement” aside from calls with the target’s chairman.

REA Group chief executive Owen Wilson.

The Australian company said it was ready to “engage immediately” and” firmly believes” this was now “essential” in order to progress the proposal and win an extension of time to undertake talks.

REA chief executive Owen Wilson believes the companies could form a valuable combination. “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 of the No.1 digital property businesses in the UK and Australia. We continue to see the potential for us to strengthen Rightmove and accelerate its growth,” he said.

“This is a compelling opportunity to create a true global technology leader on the London market via a secondary listing, operating in two of the most attractive markets in the world.”

Under the sweetened terms Rightmove shareholders would receive 346 pence in cash per share and 0.0417 new REA shares and a special dividend of 6 pence in cash.

Based on REA’s closing share price of $200, it implies a total offer value of 781 pence for each Rightmove share, in keeping with the demands of the target’s shareholders.

REA intends to include a mix and match facility for shareholders who wish to receive a greater proportion of the bid in REA shares.