Rupert Murdoch’s REA Group has shown how keen it is to acquire Rightmove by coming back with a higher bid after an initial approach was rejected.

REA has made a improved proposal to acquire Rightmove, offering 770p share in a cash and stock deal. This latest offer, made on September 22, 2024, values Rightmove at approximately £6.1 billion and represents a 9.2% increase from REA’s initial proposal on September 5.

The new offer consists of 341p in cash and 0.0422 new REA shares for each Rightmove share.

The revised offer price represents a significant premium to Rightmove’s recent trading prices, including a 39% premium to its undisturbed share price on August 30, 2024. This move follows Rightmove’s rejection of REA’s previous improved offer of 749p per share on September 18, which the Rightmove board deemed as fundamentally undervaluing the company.

We will have to wait and see whether the Rightmove board see any merit in the revised offer, but it isn’t a huge increase on the initial offer.

“We believe that the combination of our world-leading expertise and technology with the attractive Rightmove business will create an enhanced experience for agents, buyers and sellers of property,” said Owen Wilson, CEO of REA.

“We live in a world of intensifying competition and this proposed transaction would bring together two highly complementary digital property businesses for investment and growth. We have today increased our proposal to an implied value of 770 pence – it provides a combination of immediate value certainty in cash and at the same time gives Rightmove shareholders an increasing opportunity in core digital property and adjacencies where we have much expertise. We are genuinely disappointed at the lack of engagement by Rightmove’s Board and we strongly encourage the Rightmove Board to engage.”

Rightmove is the UK’s leading property portal, and for it to fall into overseas hands at a low valuation will be a blow to London’s markets.

After a bumper session for US stocks overnight, UK investors may be disappointed with the soggy session for the FTSE 100, which was trading down heavily in afternoon trade.

UK-specific macro news was to blame, and concerns about the upcoming budget have started to take hold in the market.

“The FTSE 100 started off on the back foot on Friday despite record highs in the US overnight. The index was dragged lower by a surge in the pound which affects the relative value of constituents’ overseas earnings,” said AJ Bell investment director Russ Mould.

“Chancellor Rachel Reeves’ regular warnings of ‘difficult decisions’ in the Budget will be carrying increasing weight after new figures showed public debt as a share of the economy had reached 100% for the first time since the 1960s.”

UK sentiment was hit by mixed economic data related to the consumer. Retail sales rose 1% in August, but Gfk Consumer Confidence fell on worries about the consequences of taxes and disposable spending.

The FTSE 100 was down 0.8% at the time of writing. Although the S&P 500 surged to record highs overnight, US futures were on the back foot after a warning from FedEx about their outlook.

“Often seen as a good indicator of the health of the wider economy thanks to the breadth of its exposure across areas like transportation, logistics and e-commerce, FedEx’s big warning overnight might have wider resonance. It was severe enough to wipe $8 billion off its market value,” Russ Mould said.

“FedEx’s shares were down by double digits in pre-market trading as the company slashed its guidance after missing first-quarter forecasts by a notable degree. The company’s core Federal Express business is really in the doldrums.”

In London, the top risers and fallers were almost a mirror image of yesterday’s leaderboard. Utilities companies were among the very few gainers on Friday, and cyclical sectors were heavily in the red.

National Grid was the top riser with a 1% gain, and United Utilities wasn’t far behind.

All the optimism evident in retailers yesterday was obliterated after this morning’s economic data. Frasers Group and Kingfisher were heavily hit. Even B&M Value was down more than 2%.

Burberry, set to be ejected from the index on Monday, was the top faller with a 4% loss.

Whisper it, but it seems like IPO season may be coming back to AIM.

While the index has suffered a dearth of quality listings over the past couple of years, recent new entrants to the market include Helix Exploration, Pulsar Helium, MicroSalt and Rome Resources. The next one to watch is GenIP (AIM ticker GNIP), a remarkable GenAI service business that’s already revenue-generating, the second spin-off this year from Tekcapital.

This new AIM IPO is set for its first day of dealing 2nd October. Tekcapital, through its subsidiary Tekcapital Europe, will end up owning circa 64% of the share capital of GenIP post-admission, with an anticipated raise of approximately £1.5 million. Yes, this is fairly moderate.

MicroSalt Progress

But as a reminder, the last Tekcapital IPO was MicroSalt; the spin-off shot up to 114p out of the gate and even after correcting is still worth some £27 million. Given that TEK retains a 70% holding of SALT, and TEK itself only has a market cap of £12 million, there is an obvious value disconnect. Add in TEK’s holdings in Belluscura, Innovative Eyewear, and Guident — and the long-term value is obvious.

For context, MicroSalt continues to go from strength to strength, last week announcing new placements in Winn Dixie, Fresh Thyme Markets, Sedano’s Supermarkets, Northwest Grocers, Cub Foods, and Central Market, as well as bulk orders from Ingredients Online, for its SaltMe branded low sodium crisps and saltshakers.

There are now 1,200 shops across the US retailing the company’s products — and the business is using a new United Natural Foods distribution centre in Florida as well as a Kehe Foods distribution centre in Illinois to help it grow — two of the largest distributors in Northern America.

MicroSalt remains in advanced discussions with major food manufacturers, with volume commitments of approximately 350,000 lbs received in Q3. Even more order commitments are anticipated in Q4 from companies in both Mexico and the US.

And ‘positive conversations’ are also ongoing in the UK, Canada, South Africa, and the US — with the bulk business taking hold in Q4.

Indeed, CEO Rick Guiney remains ‘very excited about the placement of our MicroSalt products and the consequential growth in distribution within UNFI, Kehe and Ingredients Online. All of these retailers have strong presence in their respective markets, and this continues our efforts to have MicroSalt in every kitchen pantry across the US and beyond.’

GenIP IPO

But GenIP is the news of the day — and here’s why. The spin-off has proposed an IPO offer on AIM — having already filed a Schedule One Form with the London Stock Exchange.

GenIP provides artificial intelligence analytic services to help various companies, research institutions and venture funds assess and commercialise new discoveries. It does this by combining expert human technical review with GenAI algorithms to provide insightful services that function better than human work alone.

Current clients include Brazil’s National Nuclear Energy Commission, Fundación Copec UC (a strategic alliance between Empresas Copec and the Pontificia Universidad Católica de Chile), and the University of Huddersfield — though the client target list is large and growing.

For perspective, the company will be targeting the AI analytics market which is estimated to be worth $5 billion by 2030 through its two services: Generative AI enhanced research reports assessing market potential of tech breakthroughs, and Generative AI executive recruitment services to find the people to deliver them to commerciality.

CEO Melissa Cruz notes ‘We are entering a transformative phase in the Generative Artificial Intelligence growth story. The next chapter will be driven by the applications of generative AI and the revenue opportunities businesses will realise by integrating this technology into their core services. At GenIP, we see generative AI as an integral revenue generation tool, not just as a means of cost savings or headcount reduction. Generative AI is at the heart of the solutions we deliver to our clients and will be fundamental for the growth of GenIP. We believe that GenIP’s unique business model offers investors a valuable opportunity to engage with the rapidly expanding Generative AI analytics market and the research institutions and technology companies that fuel much of the world’s innovation.’

GenIP has developed its own generative AI software — Invention Evaluator — which alongside executive recruitment platform Vortechs™ may help clients enable better, faster and more affordable technology commercialisation and investment decisions.

The software should allow businesses to better evaluate and commercialise their technology discoveries. The Generative Artificial Intelligence (GenAI) enhanced research reports assess their market potential and the GenAI executive recruitment service matches technology organisations with experienced executives and business leaders specifically capable of delivering them to market.

Or in other words, the company’s tech helps other organisations better monetise their advances and find the right people to make this happen cost-effectively.

Tekcapital comments

Tekcapital Executive Chairman Dr Clifford Gross enthuses that ‘GenIP’s Invention Evaluator and Vortechs have been instrumental in commercialising numerous technological innovations, allowing them to develop from a clean piece of paper to operating companies and listed spinouts. Now, having forged commercial relationships with leading research institutions and successfully launched revenue-generating GenAI analytics services, we believe the Company is well placed for the next chapter of its growth story as a stand-alone Company providing GenAI services to the wider market.

The new services were launched in September 2024 whereupon the Company received orders for 40 analytical assessments and three executive search assignments.’

Perhaps just as important as the orders is the personnel; Non-executive Chair is Lord David Willetts, who also serves as Chair of the UK Space Agency — alongside Oxford Professor and former Chairman of the UK Atomic Energy Authority Dr David Gann as a non-executive director.

The company’s website will go live at AIM admission with more detail, but given the market reaction to the MicroSalt IPO, it is certainly one to watch.