US property giant CoStar seals $3b deal for Nine | Australian Markets

Australian property listings platform Domain has sealed a $3 billion deal with CoStar after the US suitor sweetened its offer to get its arms on the Nine Entertainment-controlled group.

CoStar, which already has a near-17 per cent stake in Domain, has been circling the company since February, when it lobbed an all-cash offer of $4.20 a share.

It returned a month later with an additional 23¢ a share — the $4.43-a-share bid is a 50 per cent premium to its one-month weighted average earlier than the offer was revealed.

Domain stated on Friday it had now entered into a binding scheme implementation deed and is urging shareholders to back the deal.

With Nine holding a 60 per cent stake in Domain and declaring its help for the takeover, the ultimate stumbling block now appears solely to be a nod from the Foreign Investment Review Board.

Domain chair Nick Falloon stated CoStar’s proposal — with restricted circumstances — “represents compelling value and a high degree of certainty” for shareholders.

“This proposal is an endorsement of the strong fundamentals of Domain, and we are confident this position will be further strengthened with CoStar’s support,” Mr Falloon stated.

CoStar, a $52 billion Nasdaq-listed company, pitches itself as a supplier of info, analytics, and advertising providers to the industrial property industry in North America and Europe.

Its deal for Domain might now shake-up rival REA Group’s dominance of the Australian real estate space and its far more in style realestate.com.au web site.

“We’re pleased to have reached an agreement with Domain and to see Nine’s support of this transformative transaction,” CoStar chief government Andy Florance stated.

“With our technology, scale, and the innovation we’re known for, we see a tremendous opportunity to enhance the Australian property market.”

Nine owns the Nine free-to-air TV community, newspapers together with The Age and Australian Financial Review, and radio stations reminiscent of Sydney’s 2GB and Melbourne’s 3AW.

But Domain has turn out to be an more and more important source of income as conventional media promoting declines and a few market watchers stated it will take an engaging offer for it to contemplate relinquishing its maintain.

The money era energy of Domain overtook Nine’s publishing arm within the December half-year because the group’s second-biggest earner after the tv division.

Its revenue rose 14 per cent to $77.8 million earlier than curiosity, tax, depreciation and amortisation and now accounts for 29 per cent of group earnings. Domain’s income was 7 per cent higher at $217.2m.

CoStar’s success in snagging Domain extends a world wave of consolidation and tried takeovers within the property sector as borrowing prices across the world begin to fall.

REA Group made a number of ill-fated gives for the UK’s Rightmove final 12 months.