Citi has reaffirmed its Sell rating on Rightmove (OTC:RTMVY) Plc (RMV: LN) (OTC: RTMVY) with a price target of GBP5.10. Rightmove Plc (LON:RMV) recently declined an acquisition proposal from REA of 705p per share, which consists of 305p in cash and the remainder in shares.
The offer was initially valued at 698p based on the September 10 closing price, marking a roughly 26% increase from Rightmove's share price on August 30.
The Board of Rightmove has characterized the bid from REA as "opportunistic" and a significant undervaluation of the company and its potential.
The deadline for REA to make a formal offer under the Takeover Code is set for September 30. Observing the current situation, the offer presents only a 4% premium over Rightmove's closing share price on September 10.
Citi's analysis suggests that while the acquisition bid has been rejected, there is a precedent for property platforms like Scout24 and Hemnet to turn down offers despite the premiums proposed.
The possibility of knowledge and expertise transfer from REA, particularly in the Commercial & Developer sectors, is noted, though the practicality of such a transfer is questioned due to the differences in international markets and technology platforms.
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