REA Group's non-binding indicative proposal to the Board of Directors of UK-based Rightmove has been rejected.

The ASX-list real estate group submitted the combined cash and share offer on 5 September 2024.

Under the terms of the proposal, REA Group was offering 305 pence in cash and 0.0381 new REA shares for each Rightmove share. This implied a total offer value of 705 pence for each Rightmove share and valued Rightmove’s entire issued and to be issued ordinary share capital at approximately £5.6 billion. The proposal represented a 27% premium to Rightmove’s share price on 30 August 2024, and a 29% premium to the Rightmove’s 6-month volume weighted average share price of 548 pence. Rightmove’s EBITDA for the 12 months ended 30 June 2024 was £272 million.

Under the proposal, Rightmove shareholders would hold approximately 18.6% of the combined group’s issued share capital following completion of the proposed transaction. The cash component of the proposal was expected to be funded through third-party debt and existing cash resources.

REA intended to apply for a secondary listing of all of its ordinary shares in London, enabling trading in REA ordinary shares on both the London Stock Exchange and the Australian Securities Exchange.

The proposal was non-binding and subject to customary conditions, including completion of due diligence to the satisfaction of REA. REA also reserved the right to make an offer for Rightmove at a lower value and/or on less favourable terms under certain conditions.

But it's not to be, and the deal at this stage has stalled. REA said it will continue to keep the ASX informed in accordance with its obligations.