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REA Group Ltd (LSE:REA) has put forth a series of acquisition proposals for Rightmove plc, culminating in a Further Improved Proposal announced on September 22, 2024. Here are the essential details of the latest offer:
- Proposal Overview:
- The Further Improved Proposal offers Rightmove shareholders 341 pence in cash along with 0.0422 new REA shares for each Rightmove share.
- This translates to a total offer value of 770 pence per share, valuing Rightmove at approximately £6.1 billion.
- Comparison to Previous Offers:
- This new proposal represents a 9.2% increase over the initial offer made on September 5, 2024, which valued Rightmove shares at 705 pence.
- Additionally, it provides substantial premiums compared to Rightmove's recent trading prices:
- A 39% premium to the undisturbed share price of 556 pence on August 30, 2024.
- A 41% premium over the 6-month volume-weighted average price of 548 pence.
- A 43% premium to both the 12-month and 24-month volume-weighted average prices, each at 540 pence.
- Valuation Metrics:
- The proposal indicates an enterprise value multiple of approximately 22.4 times Rightmove's EBITDA for the twelve months ending June 30, 2024, equating to £272 million.
- Post-Transaction Shareholding:
- If the acquisition proceeds, Rightmove shareholders would retain around 20% of the combined group's share capital.
- Call to Action for Shareholders:
- REA is urging Rightmove shareholders to encourage the Board to engage in discussions regarding the proposal, emphasizing its potential for significant immediate value and future growth opportunities.
- Company Performance:
- REA has shown impressive financial performance, tripling its revenue and EBITDA over the past decade, with a share price increase exceeding 300% during the same period.
The deadline for a response under Rule 2.6(a) of the Code is set for September 30, 2024, creating a sense of urgency as the negotiations unfold. REA’s proposal aims to reshape the landscape of the real estate digital marketplace while providing Rightmove shareholders with a compelling exit opportunity.
