REA, the Australian property company majority-owned by Rupert Murdoch’s News Corp, has made a £5.6bn offer for Rightmove, the UK’s biggest online real-estate portal.

The Rightmove board rejected the 705p a share offer, worth 18.6% of the enlarged company post-deal, which comes a week after REA confirmed it was considering a cash and share offer for Rightmove.

Shares in Rightmove closed at 555.6p on 30 August, the last trading day before news of REA’s initial interest was revealed in the press, and rose 1.2% or to 678.6p in early trading on Wednesday.

REA said in a statement released on the Australian stock exchange on Wednesday: “REA confirms that on 5 September 2024 it made a non-binding indicative proposal to the board of directors of Rightmove regarding a possible cash and share offer for the entire issued and to be issued share capital of Rightmove. REA was informed on 10 September 2024 that the Rightmove board rejected the proposal.”

Rightmove said: “The board carefully considered the proposal, together with its financial advisers, and concluded that it was wholly opportunistic and fundamentally undervalued Rightmove and its future prospects. Accordingly, the board unanimously rejected the proposal … shareholders should take no action.”

Analysts also believe the move by REA for Rightmove, which controls more than 80% of the UK online property market, is opportunistic and undervalues the business, as profits are expected to rise in the coming years with the UK property market rebounding.

REA said if it was eventually able to complete a deal for Rightmove it would open a secondary listing on the London Stock Exchange, arguing that this would “provide the opportunity for a wider pool of investors to gain exposure to a global and diversified digital property company” on the LSE.

After news of a potential bid by REA, Peel Hunt analysts said Rightmove was the “cheapest publicly listed classifieds businesses in Europe”.

In 2001, Murdoch’s eldest son, Lachlan, swooped on the struggling REA, taking a 44% stake for A$2m (£1.3m), and increased News Corp’s stake to 62% in 2005 after a takeover deal fell through.

The company is now worth A$26bn and News Corp’s overall digital real-estate services division, which includes operations in the US, accounted for a third of total global profits of $1.5bn in the year to the end of June.

In October last year, the US property data company CoStar paid £100m for the UK’s OnTheMarket site as a launchpad for its ambition to “participate aggressively” in the property portal game across Europe.

In 2018, the US private equity group Silver Lake acquired Zoopla, the UK’s second-biggest property portal and owner of brands including PrimeLocation, for £2.2bn.

Bloomberg first reported the news of the opening of initial talks between REA and RightMove.