US online property giant CoStar has lobbed a multibillion-dollar bid to buy out all of Nine Entertainment-controlled Domain Group.
Domain revealed to the ASX on Friday that it had received the unsolicited cash takeover offer, priced at $4.20 a share — more than $1 higher than the target’s last closing price of $3.17.
The deal values the property sales platform at about $2.6 billion.
CoStar, a Nasdaq-listed property data powerhouse, purchased 16.9 per cent of Domain’s shares on Thursday at the bid price, which would have a material effect on Nine.
CoStar, which bills itself as a real estate analytics firm, has more than $3.3 billion in cash reserves after its recent acquisition of Matterport, a 3D spatial mapping platform for the real estate sector.
It has a history of acquisitions, including buying UK property portal OnTheMarket for £100 million and bidding for News Corp’s Move in 2023.
While CoStar has previously focused on Europe for expansion, recent comments from chief executive Andy Florance suggest Australia is now firmly on its radar.
In a brief statement to investors, Domain’s board said it was assessing the offer and would appoint advisers to “assist in this process.”
The bid comes amid a change of management for the company. Greg Ellis was last week appointed interim chief executive for up to 12 months as the board continues the search for a permanent replacement following the exit of Jason Pellegrino.
The former head of Google’s Australian operations, Mr Pellegrino had led Domain for six years but agreed to a leadership transition process in October last year.
Domain last week reported a 28.3 per cent rise in net profit for the first half to $33.1 million, with revenue 7.4 per cent stronger than a year before at $217.2m.
“We are strengthening our collaboration with Nine, with significant cross platform branding opportunities during the recent Australian Open,” Mr Pellegrino said in a statement outlining the results.
“We have also leveraged the power of Nine in the launch of a Victorian edition of Prestige magazine.
“And finally, we are progressing our investment into our technology platforms to accelerate the Marketplace journey, and broaden the range of Only on Domain experiences available to our users. At the same time, we are achieving productivity gains to offset this increased investment.”
Nine is yet to respond to CoStar’s bid.
https://thewest.com.au/business/markets/us-giant-costar-makes-26b-play-for-nines-domain-holdings-c-17797475
