Rightmove (RMV) 676p

Gain to date: 17%Market cap: £4.4 billion 

On 11 January Shares said that the UK’s biggest property portal Rightmove (RMV) was unloved and should be snapped up by investors due to a bargain-basement valuation.

WHAT HAS HAPPENED SINCE WE SAID BUY?

On 26 July the company reported a strong set of first half results with a 7% rise in revenue to £192.1 million as agents and new homes developers renewed contracts.

Rightmove also unveiled bumper returns to shareholders of £100.2 million through share buybacks and dividends.

The company maintained its guidance for the full year 2024 with expected revenue growth of 7-9% and full year ARPA (average revenue per advertiser) growth of £75-85.

Fast forward to 2 September and it emerged Rightmove was subject to takeover interest from an Australian property listings company REA which has investments in property portals in Australia, India, Singapore, Vietnam, Malaysia, Thailand, and the US (it is controlled by Rupert Murdoch’s News Corp).

No further details have been given by REA about any potential approach other than that it might be a cash and shares deal. REA has until 5pm on 30 September to formally make an offer or walk away.

Not surprisingly Rightmove’s shares reacted positively to this takeover interest, up around 27% on the day.

WHAT SHOULD INVESTORS DO NOW?

Hold on for now. REA’s move looks opportunistic and we would expect for any bid to be successful it would have to be at a higher premium than the current share price implies. Panmure Liberum analyst Sean Kelly says a premium of up to 60% versus the undisturbed share price would be realistic and Berenberg thinks a take-out price of 830p would be in-line with the price tag of other platform businesses. 

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