A third bid came in for Rightmove from REA yesterday, valuing the business at around £6.1Bn. This time last year, when CoStar was acquiring OnTheMarket, Rightmove was knocking along at £4.4Bn, so this is quite the premium.
Things have changed quite a lot over the last week, too. Whereas REA shareholders were lukewarm at best about the potential deal – shares slumped in the group after the first rejected bid – they’re now up 7% as those acquiring them see more potential for Oz-style ‘Vendor Paid Advertising’ (VPA) to sweep into the UK market (and into REA’s coffers).
Similarly, Rightmove’s Board has shifted from faux-outrage at the nerve of the antipodeans to mount such an unwelcome approach, to ‘considering’ the latest offer. Whilst some commentators think this is a defensive move whilst RM reorganises and prepares to fight off an even meatier bid, others consider this generally means one more heave from REA into the £6.5Bn area will probably garner Board support.
Regardless, it looks like the Murdochs - who own 61% of REA Group and are currently locked in a Succession-style argument over which of the children gets Daddy's toy - are determined to win this. A hostile bid, appealing to the RM shareholders over the heads of the Board, is a likely next step.
I wouldn’t rule out a third party coming in at the last to try and scupper the deal, nor some angry RM investors trying to stall it but, as of today, it’s looking a darn sight more likely than it was when Bid Two was dismissed as 'opportunistic' by RM last Friday.
To reiterate, for agents this is terrible news. Subs will not go down – not by any stretch of the imagination - and agents’ new job is going to be flogging REA products to vendors. Yes, they’ll take a cut, but the celebrated ‘independence’ of our industry is under serious threat here. If you don’t want to be front-of-house for Rightmove, their last-mile salespeople knocking down doors and positioning their Premium Tools as the best way for a vendor to max their property price, then now’s the time to seriously consider your options.
The heat is turning up, the pan is starting to boil. You really, really need to look at alternatives right now.
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