After Rightmove rejected a third takeover bid, what does the future hold for the FTSE 100 real estate giant?

The big one FTSE 100 a real estate and leasing company Rightmove (LSE: RMV) has rejected a third and potentially final offer from the Australian asset REA Group. On Wednesday (25 September) it rejected the £6.1bn offer despite it representing a 37% premium to the share price. According to reports, there was a suggestion that “materially low prices” Company.

REA Group is owned by Robert Murdoch's NewsCorp and operates on the same business model as the UK business, providing an online property portal for renters and buyers in Australia. A successful merger in the UK would make it the largest company of its kind in the world.

But Rightmove seems determined to stick to its guns and remain a UK-only business.

So where from here?

An initial offer of £5.6bn made in early September boosted the share price by around 30% to around 680p. It managed to hold that level for a month while negotiations continued. But will that continue if no other bid is offered?

It is worth noting that takeover bids did not attract much attention from buyers. Berenberg set a buy rating on the stock on September 3 but that's it. Although the big six fund management firms have short positions open in them.

On the face of things, there is little to show that the company is important enough to confidently refuse an offer. On the other hand, REA's eagerness to buy it suggests there may be untapped value that isn't immediately apparent.

The basics

Right now, Rightmove does not represent a great investment opportunity in my opinion. paid a dividend of 1.37 %. Over the past five years, the share price has increased by 24.6%, representing an annual return of only 4.5%.

A £10,000 investment in that figure will grow to just £13,000 over five years, with the profits reinvested. Not much to write home about. Buying and renting one of the company's many listed properties will likely bring high returns.

The stock's 12-month price average is around 635p, representing a 7% drop from current levels. Income is predicted to continue to rise but earnings are expected to increase by 10% by 2026.

The growth argument

One very promising metric is future return on equity (ROE), which is expected to be 320% over three years. In addition, the return on operating income (ROCE) is 363%, up from 183% three years ago. Both of these metrics reflect a business that is allocating its funds in an efficient and productive manner.

So I think analyst forecasts may be a little optimistic.

The new Labor government is pushing policies to build affordable housing and help first-time home buyers. If these policies come to pass, they could give Rightmove a much-needed boost. And let's not forget, REA still has until the end of September to make another giveaway. If the company accepts an even higher bid, I expect it will increase the share price even more.

It's certainly an interesting situation and Rightmove is a stock I'll be keeping an eye on as developments continue.