Well, that was mildly diverting, wasn’t it?
REA Group essentially got bounced into making an offer at the beginning of September for Rightmove. What were undoubtedly ‘soundings’ taken by the Aussie portal to try and understand how welcome a bid would be amongst Rightmove shareholders, ended up with rumours circulating so widely that share prices were being impacted on the public markets.
Rules is rules, and REA Group’s enquiries prompted the sinisterly-named ‘Disclosure Panel’ to demand they make their interest public. Shares in Rightmove instantly shot up 30% and REA’s plummeted 7%.
But this was, really, too early for REA to mount a successful ‘hearts and minds’ campaign to woo RM’s shareholders. There will be questions, inevitably, about REA CEO Owen Wilson (not that one, the other one)’s tactics in trying to establish initial interest. Ham-fisted would seem to be a kind description – it’s certainly difficult to see this as anything other than an embarrassment to REA (and, by extension, the Murdochs, who own 61% of it and were right behind the audacious move).
Four increasingly desperate bids later, raising the value of Rightmove from £4.4Bn before the first bid to £6.4Bn at the last, and REA gave up. Not saying that I called it (though you can watch this podcast for yourself from 38.45), but the rushed nature of the bid and its negative reaction from both REA shareholders and Rightmove’s Board meant that it was always going to take something quite dramatic to seal the deal. In the end, it was a bit of a damp squib all told.
That’s not to say that this is good news for anyone. The statement from Rightmove celebrating its fending-off of the approach mentions its agent customers precisely zero times – and its shareholders five.
This is all that Chair Andrew Fisher had to say: “The Board of Rightmove is grateful to all of its shareholders who have engaged and shared views through this process. Rightmove is an amazing business with a very strong team and a clear strategy. We are confident that we will deliver significant future value for shareholders.”
So the £6Bn+ question is now – what does this mean for its agent customers? I’m pretty sure that the Board will be pumped and roaring defiance at its successful bounce of this unwanted approach. But they’ll be equally aware that the issues that led REA to make an offer – Rightmove’s flat share performance (despite significant equity buybacks) and its narrow product and territory base – will be under greater scrutiny from those shareholders that chose to put its faith in CEO Johan Svanstrom and co’s strategy.
This means they will have to hit those aggressive targets. They will have to make the shares worth upwards of that £6Bn. And it means that they will have to rinse their current customer base even more for profit.
As I said in the RAN podcast from a couple of weeks ago, now’s the time to do three things;
1. Get a ‘Portal Recovery Plan’ together; you know what will happen if the electricity grid collapses or a fire happens in your office. What will you do when the emergency is having to come off Rightmove, because they’re charging so much, or die? Shouldn’t that eventuality be explored – because it’s getting ever-closer.
2. Look at alternatives; CoStar is coming over the hill with OnTheMarket (though the wait for significant impact is beginning to get tiring / worrying) and new sites like Jitty are free and well worth a look. Just make sure those eggs aren’t in a single basket when the relentless prices rises from Rightmove hike even higher.
3. Get AI literate; this is a technology that can genuinely change how potential sellers, buyers, landlords and tenants interact with you and your properties. It’s also insanely cheap. Have a dig around there – obviously ModelProp can help but we’re much more about guiding AI literacy rather than flogging you stuff that doesn’t work for you.
This should be a wake-up call to all agents. Rightmove isn’t inevitable. Print wasn’t (thought it might have felt like it 25 years ago).
The current state of the most-visited UK property portal makes it a target. Those that seek to leverage more ‘shareholder value’ – whether the current crowd or another, more aggressive and organised acquirer than REA – see plenty more room for ‘growth’ in your fees.
Rightmove in 2025 is going to be one tough advertising medium to afford. Just make sure that you’re not the ones that have to pay for this ill-thought-out, grim horsetrading in the stock market.