Domain approves Costar sale subject to due diligence
Domain’s board has approved Costar Group’s offer to acquire 100% of the real estate platform company, subject to due diligence, after the US group increased its offer on Friday to $4.43 per share.
Domain announced to the market on Monday morning it has entered into an exclusivity and process deed with Costar Group, helmed by billionaire Andy Florance.
The US-based Costar has a market cap of over A$50 billion (US$32.11b) and runs homes.com and apartments.com – two of the top listings sites in America.
As part of the deal, and as a condition of the proposal, each of Domain’s directors, include those from Nine Entertainment, must “unanimously recommend Domain shareholders vote … in favour of the scheme of arrangement in relation to the transaction in the absence of a superior proposal and subject to an independent expert concluding, and continuing to conclude, that the transaction is in the best interests of Domain shareholders.”
The exclusively period will last for four weeks, with the option of a two-week extension, after which time Nine and Domain can seek other suitors, should they wish. Domain is being advised by UBS Securities, and Gilbert and Tobin.
Costar’s initial offering, made on February 20, was for $4.20 a share, which was 34.6% above market value at the time. In the hours prior to lobbing the takeover deal, Costar bought up 16.9% of the company at the 34.6% premium.
Nine told the market on Friday, after the deal was increased, that “as the controlling shareholder of Domain and with a focus on the best interests of Nine shareholders, it is supportive of Domain’s decision to grant due diligence access to CoStar at the increased offer price of $4.43 per Domain share, plus up to $0.04 per share of additional value by way of franking credits.”
As 60% shareholders in the real estate business, Nine Entertainment stands to clear $1.4 billion if the sale goes ahead, which will allow it to clear its $628.5 million debt.
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Nathan Jolly is the Features Editor at Mumbrella. He joined the team in July, 2023.
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