US giant CoStar makes $2.6b play for 9’s Area | Australian Markets
US online property giant CoStar has lobbed a multibillion-dollar bid to buy out all of 9 Leisure-controlled Area Group.
Area revealed to the ASX on Friday that it had obtained the unsolicited money takeover offer, priced at $4.20 a share — more than $1 larger than the goal’s final closing price of $3.17.
The deal values the property gross sales platform at about $2.6 billion.
Shares in Area soared 40 per cent on the news, pushing it larger than the bid price to $4.35 simply after the open. 9’s shares added 22 per cent to $1.76.
Shares in REA Group — the company behind Area’s rival, and Australia’s largest home gross sales website realestate.com.au — pluged alomst 10 per cent to $240.17.
CoStar, a Nasdaq-listed property information powerhouse, bought 16.9 per cent of Area’s shares on Thursday on the bid price, which might have a materials impact on 9.
CoStar, which payments itself as a real estate analytics firm, has more than $3.3 billion in money reserves after its current acquisition of Matterport, a 3D spatial mapping platform for the real estate sector.
It has a historical past of acquisitions, together with shopping for UK property portal OnTheMarket for £100 million and bidding for Information Corp’s Transfer in 2023.
Whereas CoStar has beforehand targeted on Europe for growth, current feedback from chief govt Andy Florance counsel Australia is now firmly on its radar.
In a temporary assertion to buyers, Area’s board mentioned it was assessing the offer and would appoint advisers to “assist in this process.”
9 additionally issued a short assertion following news of the bid, hinting it could possibly be fishing for a larger bid.
“Domain is of strategic importance to Nine’s media ecosystem and our long-term growth strategy,” it mentioned.
“Nine will consider the proposal with a focus on the best interests of Nine shareholders.
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 mentioned in a assertion outlining the outcomes.
“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.”
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