Citi Reaffirms Sell Rating on Rightmove Plc with Acquisition Bid Rejection - What This Means for Investors
Citi, the renowned investment management firm, has reaffirmed its Sell rating on Rightmove Plc (RMV: LN) (OTC: RTMVY) with a price target of GBP5.10. Rightmove recently turned down an acquisition proposal from REA, offering 705p per share, including 305p in cash and the rest in shares.
Despite the initial valuation of 698p based on the September 10 closing price, which represented a significant 26% increase from Rightmove's share price on August 30, the Board of Rightmove deemed the bid "opportunistic" and an undervaluation of the company.
The deadline for REA to make a formal offer under the Takeover Code is September 30, with the current offer presenting only a 4% premium over Rightmove's closing share price on September 10. Citi's analysis suggests that previous rejections of acquisition bids by property platforms like Scout24 and Hemnet may indicate a similar outcome for Rightmove.
While the potential for knowledge and expertise transfer from REA, especially in the Commercial & Developer sectors, is acknowledged, the practicality of such a transfer is questioned due to differences in international markets and technology platforms.
In conclusion, investors should closely monitor the developments surrounding Rightmove and the potential acquisition bid from REA. The rejection of the offer could impact the company's stock price and future prospects. It is essential to stay informed and consider professional advice before making any investment decisions related to Rightmove Plc.