REA Group Considers London Listing If $11 Billion Rightmove Acquisition Proceeds

2 min read | September 11, 2024 11:42 AM AEST | By Team Kalkine Media

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REA Group Considers London Listing If $11 Billion Rightmove Acquisition Proceeds — Image source: shutterstock

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REA Group Ltd, a prominent real estate company backed by News Corporation, is contemplating a London Stock Exchange listing if its ambitious acquisition of UK property portal Rightmove plc (LSE:RMV) is successful. The move comes after Rightmove's board rejected REA Group's initial offer.

On Wednesday, REA Group (ASX:REA) confirmed that it had proposed an acquisition bid valued at $11 billion, which includes both cash and shares. The offer comprised £3.05 in cash per Rightmove share and 0.0381 new REA Group shares. This proposal was made with the intention of providing Rightmove shareholders with an opportunity to own approximately 18.6% of the combined entity.

The bid represents a significant premium for Rightmove shareholders. Specifically, it is a 27% premium over Rightmove's share price as of August 30, a 29% premium on its six-month average, and a 31% premium on its 12-month average. Despite these enticing terms, Rightmove's board has rejected the offer. As of now, Rightmove has not released an official statement regarding the rejection.

Should the acquisition proceed, REA Group plans to list on the London Stock Exchange. This strategic move is aimed at broadening the company's investor base and enhancing its global presence. The proposed London listing would offer investors a chance to gain exposure to a diversified digital property business, further strengthening REA Group's position in the global real estate market.

REA Group's potential acquisition of Rightmove is part of a broader strategy to expand its footprint and leverage synergies in the property sector. Rightmove, valued at £5.3 billion ($10.4 billion), is the largest property portal in the UK, and its integration into REA Group's portfolio would create a substantial presence in the European market.

The rejection by Rightmove's board does not preclude the possibility of further negotiations or revised offers. As REA Group continues to pursue its acquisition strategy, stakeholders will be keenly watching for any updates or new developments in this high-profile transaction.

For now, REA Group's proposed acquisition of Rightmove remains a significant focal point in the real estate and financial markets, with potential implications for both companies and their investors.

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