REA Group has increased its takeover offer for British property portal Rightmove to £6.1 billion (A$11.95 billion) in an effort to engage the company’s board.
The revised offer follows the rejection of REA’s earlier bid of £5.9 billion over the weekend. Under the latest proposal, Rightmove shareholders would receive 341 pence in cash and 0.0422 new REA shares.
REA CEO Owen Wilson emphasised the strategic benefits of merging the two companies, stating: "We believe that the combination of our world-leading expertise and technology with the attractive Rightmove business will create an enhanced experience for agents, buyers and sellers."
However, Rightmove’s board has resisted engagement, characterising REA’s offers as “wholly opportunistic.” Despite this, REA is urging Rightmove shareholders to pressure the board to reconsider.
The Australian company pointed to Rightmove’s stagnant share price over the past two years as evidence of the need for change.
The proposed deal values Rightmove shares at 770 pence each — a 39% premium to the 556 pence price seen in August.
If successful, Rightmove shareholders would own around 20% of the combined entity. The cash component of the deal would be financed through long-term debt, with REA expecting to maintain an investment-grade rating.
REA believes the merger would create a leading global digital property platform, capitalising on growth opportunities in areas such as commercial property and financial services.