Domain enters binding agreement with Costar
Domain has entered a binding agreement with US real estate listings giant Costar to sell all remaining shares at $4.43, a 42% premium on the pre-bid price.
The price values Domain at around $3 billion, with majority shareholder Nine standing to pocket $1.4 billion for its 60% stake after capital gains tax.
In an announcement to the ASX giving its seal of approval, Nine said the deal “appropriately reflects the strategic value” of its stake.
Domain’s ASX announcement noted that as well as official shareholder approval, the deal was still subject to:
- Court approval
- Foreign Investment Review Board approval
- The independent expert continuing to recommend to shareholder
- “No adverse material change”
In a written statement, Domain chair Nick Falloon said: “The Domain Board has carefully considered the CoStar proposal and believes it represents compelling value and a high degree of certainty for Domain shareholders, through the cash offer and limited conditionality.”
Costar, run by billionaire Andy Florance, owns listings sites homes.com and apartments.com in the US. It expanded to the UK market with the purchase of OnTheMarket in 2023, and in February began its Australian push by buying up 16.9% of Domain’s stock.
Andy Florance
Florance told a Costar earnings call last week that both Domain and Australian market leader REA were inferior to his US product.
“Both sites pale in comparison to the product we built with Homes.com. We will bring what we built in Homes.com to Australia and the United Kingdom to win over consumers.”
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