REA Group Ltd (ASX:REA) – which has been in the news for seeking to acquire fellow property listings company, UK-based Rightmove – has appeared to be having trouble with the offer, which Rightmove has turned down.
REA confirmed to investors on Wednesday that it had made a non-binding indicative proposal to Rightmove’s board on September 5, offering its shareholders 305 pence in cash and 0.0381 new REA shares.
This would have implied a total offer value of 705 pence for each Rightmove share – valuing the latter’s entire issued and to be issued ordinary share capital at approximately £5.6 billion (or $11.01 billion).
In addition to this, Rightmove shareholders would have held approximately 18.6% of
the combined group’s issued share capital following completion of the proposed transaction.
However, on Tuesday, the Rightmove board informed REA that it had rejected the proposal, which the latter had argued could have facilitated the creation of a ‘global and diversified
digital property company, with strong margins and significant cash generation, underpinned by number one positions in Australia and the UK’.
REA shares fell on the news. At 11:33 AEST, they were trading at $198.65 – a fall of 1.89% since the market opened.