(qlmbusinessnews.com Thurs. 12th Sept, 2024) London, UK —
“Why Rightmove Turned Down a £5.6 Billion Offer from Rupert Murdoch's Firm”
Rightmove, one of the UK's leading property listing websites, has turned down a £5.6 billion takeover offer from Australian-based REA Group, which is majority-owned by Rupert Murdoch's News Corporation. The board of Rightmove dismissed the proposal as “wholly opportunistic” and argued that it “fundamentally undervalued” the company's market position and future growth potential.
REA Group's bid, if accepted, would have valued Rightmove at more than a quarter above its share price as of 30th August, giving Rightmove's shareholders a 18.6% stake in the merged company. In response to the rejection, REA announced plans to seek a secondary listing of its shares in London, hinting at a continued interest in expanding its presence in the UK property market.
REA Group's statement described its ambition to build a global property business with strong profit margins and significant cash flow. The acquisition of Rightmove, it claimed, would “enhance the UK property experience for buyers, sellers, and renters,” and provide a positive boost to the property market ecosystem.
Rightmove's decision is a fresh setback for Murdoch's business empire, following the recent struggles of Talk TV, which was shut down earlier this year. The rejection also coincides with news that hedge fund Starboard Value has filed a shareholder resolution aimed at reducing Murdoch's influence within News Corporation. The proposal seeks to dismantle the structure that currently allows Murdoch to control 40% of News Corp's voting power despite owning just 14% of its equity.
Rupert Murdoch, who stepped down as chairman of Fox and News Corp in 2023 in favour of his son Lachlan, retains a significant stake in REA Group, having first invested in 2001. News Corp currently owns 61% of REA’s shares. Earlier this year, News Corp also announced a multi-year partnership with artificial intelligence firm OpenAI to integrate content from its media outlets, such as the Wall Street Journal, New York Post, and The Times, into AI platforms like ChatGPT.
As it stands, REA has until 5pm on 30th September to revise its bid or walk away, leaving the future of any potential merger uncertain.
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