Rightmove rejects Murdochs’ ‘opportunistic’ £5.6bn takeover bid

Rightmove has rejected an “opportunistic” £5.6bn takeover offer from the Murdoch family, claiming it undervalues the online estate agent.

REA Group, the Australian real estate giant owned by Rupert Murdoch’s News Corp, last week tabled an indicative cash and share bid worth 705p per share, reflecting a 27pc premium on the London-listed company’s valuation.

However, Rightmove’s board unanimously rebuffed the offer on Tuesday.

In a statement to investors, it said: “The board carefully considered the proposal, together with its financial advisers, and concluded that it was wholly opportunistic and fundamentally undervalued Rightmove and its future prospects.”

Under City takeover rules, REA now has until 5pm on September 30 to either make a firm offer or walk away.

Melbourne-based REA, which has a market value of A$26bn (£13bn) and owns a number of property brands including realestate.com, first revealed its interest in Rightmove last week.

This triggered a 25pc surge in Rightmove’s share price. The UK’s largest online property business had a market value of £5.3bn at Tuesday’s close.

Under the terms of REA’s proposed deal, Rightmove shareholders would hold roughly 18.6pc of the combined group’s share capital and would remain entitled to receive the interim dividend of 3.7 pence per share.

REA said: “The proposal combines certainty of value, in cash, at a significant premium to recent trading while at the same time giving Rightmove shareholders the opportunity to benefit from the future value creation of the combined business.”

The Australian company said the cash component of the deal would be funded through third-party debt and its existing finances.

REA, which is listed in Sydney, also plans to apply for a secondary listing of its shares in London.

It said: “This would provide the opportunity for a wider pool of investors to gain exposure to a global and diversified digital property company on the London Stock Exchange.”

REA’s swoop comes as Rightmove grapples with a downturn in the property market as high mortgage rates continue to put off buyers, though market activity is expected to pick up as interest rates come down.

It also highlights efforts by the Murdoch family to diversify away from its traditional media business as patriarch Rupert hands over the reins to his eldest son, Lachlan.

The 93-year-old tycoon is trying to alter the terms of the family trust to hand sole control to Lachlan. However, this has triggered a backlash from his other children and a legal battle is set to kick off in a Nevada courtroom in the coming days.

Broaden your horizons with award-winning British journalism. Try The Telegraph free for 3 months with unlimited access to our award-winning website, exclusive app, money-saving offers and more.