Rightmove Rejects £5.6 Billion Bid from Rupert Murdoch’s REA Group

Rightmove, the UK’s leading property listing website, has turned down a substantial £5.6 billion takeover offer from REA Group, an Australian property site largely owned by Rupert Murdoch’s News Corporation. This rejection represents a significant setback for Murdoch’s media empire, which has faced recent challenges, including the failed launch of Talk TV earlier this year.

Rightmove’s board dismissed the bid from REA Group as “wholly opportunistic” and argued that the offer undervalued both the company’s current performance and its future potential. The board’s decision highlights their belief in Rightmove’s robust market position and long-term prospects, despite the lucrative nature of the proposal.

In a statement released on Wednesday, Rightmove criticized the offer for being far below their share price as of August 30. If accepted, the deal would have seen Rightmove shareholders holding approximately 18.6% of the new combined entity. This would represent a considerable shift in ownership and influence within the UK property market.

REA Group’s intention was to establish a dominant property business with strong financial performance in both the UK and Australia. They projected that acquiring Rightmove would enhance the property experience for buyers, sellers, and renters across the UK, thereby contributing positively to the broader property market ecosystem.

In response to Rightmove’s refusal, REA Group has indicated that it plans to seek a secondary listing of its shares on the London Stock Exchange. This move could potentially make the company more appealing and better positioned for future opportunities.

The deadline for REA Group to either make a revised offer or withdraw from the bidding process is 5 p.m. on September 30. This timeline will determine whether REA will attempt to address Rightmove’s concerns or abandon the takeover bid altogether.

The rejection of the offer coincides with other developments within Murdoch’s business interests. Starboard Value, a prominent hedge fund, has recently filed a shareholder resolution aimed at diminishing Murdoch’s influence at News Corp. The resolution seeks to eliminate the dual-class stock structure that currently grants Murdoch 40% of the voting power despite his actual equity stake of around 14%. This proposal reflects ongoing scrutiny and challenges faced by Murdoch’s conglomerate.

Earlier this year, News Corp signed a significant multi-year agreement with artificial intelligence firm OpenAI. This partnership means that content from major News Corp publications, such as the Wall Street Journal, the New York Post, and the Times, will be used to train AI models like ChatGPT.

Murdoch’s involvement with REA Group dates back to 2001 when he first acquired a stake in the company. Today, News Corp holds a 61% share in REA Group. Murdoch’s personal net worth is estimated to be just over $20 billion (£15 billion), reflecting his substantial influence in both media and investment sectors.

The current standoff between Rightmove and REA Group illustrates the complexities of high-stakes corporate transactions and the broader implications for Murdoch’s business ventures. As the deadline for a potential revised offer approaches, the future of this proposed acquisition remains uncertain, underscoring the volatility and competitive nature of the global property market.