REA Group shares gain after ending Rightmove pursuit
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More news: Shares in REA Group lifted in morning trade after the Murdoch-controlled real estate platform ended its pursuit of UK property portal Rightmove after four takeover bids were rejected.
REA shares rose 4.6% to $210.19 and since the beginning of the year it has surged 16%.
Murdoch's REA Group abandons UK's Rightmove pursuit
The news: Rupert Murdoch's REA Group has ended its pursuit of UK property portal Rightmove after four takeover bids were rejected.
The numbers: REA's final offer, valuing Rightmove at £6.2 billion ($11.97 billion), was deemed unattractive, with Rightmove saying it "materially undervalued" the company.
REA does not intend to make a new offer for Rightmove, the company said in a statement to media. It cited a lack of "meaningful engagement" and information from Rightmove as factors impeding progress.
Rightmove's shares dropped by over 11%, before recovering some losses close 7.66% lower. Meanwhile, REA's shares are down 8% since news of its interest emerged in late August, thought they 0.50% higher on Monday.
The context: Earlier in the day, Rightmove had pushed REA to put forward its “best and final proposal,” and dismissed its request to extend the Monday deadline to make a firm offer.
The News Corp-controlled REA wanted to expand into the UK market, potentially listing on the London Stock Exchange had the acquisition succeeded.
But after some engagement between the companies, Rightmove remained unconvinced by REA’s overtures, opting instead to back its own strategic direction.
What they said: REA said it was “disappointed” with the UK group’s limited engagement, but Rightmove said it had taken every call from REA and held meetings, but nothing shifted its view that REA’s offer was insufficient.
"The potential acquisition of Rightmove was dependent on coming to an agreement at a fair price, which would have required meaningful engagement and a constructive dialogue," REA's statement said.
REA CEO Owen Wilson said the company was "disappointed" with Rightmove's limited engagement. "They had nothing to lose by engaging with us."
The source: Bloomberg
