The Rupert Murdoch-controlled Australian property group REA has upped its proposed offer for Rightmove, the UK’s biggest online property portal, to £5.9bn.

REA, in which Murdoch’s News Corporation has a 61% stake, has sweetened its initial proposal by about £300m after Rightmove’s board last week unanimously rejected the first offer as “fundamentally undervaluing” the company.

The initial cash and stock offer, which valued the business at 705p a share – giving Rightmove shareholders 18.6% of the enlarged REA group post-deal, has now been upped to about 750p.

Rightmove called REA’s first non-binding indicative offer “wholly opportunistic”, a takeover attempt made before its profits and share price rebound in line with a recovery in the UK property market, and told shareholders to stick with the company and not engage with REA.

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. The company’s market value has since surged on the takeover interest to almost 675p, a market capitalisation of almost £5.5bn.

REA has until the end of the month to make a formal offer for Rightmove or give up its pursuit of the company under UK takeover rules known informally as PUSU, “put up or shut up”.

After making the initial offer, 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”.

The UK online property market has been the focus of increasing merger and acquisition activity in recent years. Last October 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.

In 2001, Murdoch’s eldest son, Lachlan, swooped on the struggling REA, taking a 44% stake for A$2m (£1m), and increased News Corp’s stake to 62% in 2005 after a takeover deal fell through.

The company is 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. The Financial Times first reported the news of an increased offer for Rightmove by REA.