REA Group "Frustrated" by Lack of Dialogue as Rightmove Board Rejects Third Bid

Rightmove's Board of Directors has rejected a third takeover bid from the Murdoch-controlled Australian portal operator REA Group.

The British real estate marketplace company released a brief statement to the London Stock Exchange this morning which called the "unsolicited, non-binding and highly conditional" third offer "unattractive" and urged its shareholders not to take any action.

The Australian company, which has until the 30th of September to make any new offers, also released a statement in which it bemoaned Rightmove's refusal to enter into constructive dialogue.

"REA is disappointed by the latest rejection from the Board of Directors of Rightmove and is frustrated that, save for the rejection of REA's three previously disclosed proposals, REA has still had no substantive engagement with Rightmove. "

The statement also reiterated REA's belief that the latest proposed deal represents good value for Rightmove's shareholders and encouraged them to implore the board to enter into discussions.

"REA continues to firmly believe that the Further Improved Proposal represents a highly compelling proposition for Rightmove's shareholders at a significant premium to relevant trading metrics, providing a combination of immediate value certainty in cash and at the same time giving Rightmove shareholders the opportunity to benefit from the future value creation of the combined business."

"REA urges Rightmove shareholders to encourage the Board of Directors of Rightmove to engage in constructive discussions with REA to work towards a recommended transaction, ahead of the upcoming deadline".

The third rejection in quick succession comes after REA Group upped its initial bid from £5.6 billion to £5.9 billion on the 20th of September and then again to £6.1 billion on Monday.

In terms of shareholder value, REA has said its latest offer (771p per share) is worth a 39% premium to Rightmove’s share price before the announcement of the initial offer. Rightmove has disputed the premium figure claiming that the “implied value” of the bid had dropped to 761p per share, after falls in the REA share price. In its latest statement, Rightmove said that value had edged down again to 759p.

Below: Watch former REA Group CEO, Simon Baker discuss the deal on the PPW Podcast.