After several weeks of due diligence by CoStar, which owns 16.9% of Domain, the companies agreed to the US firm's offer of A$4.43 per share.
Media company Nine Entertainment, Domain's largest shareholder, has expressed its support for the deal and will receive $1.4 billion for its 60.1% stake. Nine shares jumped 8.1% to $1.61.
CoStar acquired a 16.9% stake in Domain on February 21, ahead of an initial takeover offer of A$4.20 a share, which was later raised. The acquisition will be put to a shareholder vote in mid-August.
Nine, which owns popular newspapers such as The Age and the Australian Financial Review, has failed to achieve the same success as its competitor REA, controlled by News Corp.
REA's market value reached A$33.16 billion, up more than 160% since 2020.
The domain is currently worth 2.69 billion Australian dollars.
“We do not expect a material impact on REA's position over the next 1-3 years, especially given the implementation of REA products, and expect marketing schedules to initially expand if CoStar is successful in expanding Domain's audience,” Citi analysts said.
Originally a provider of information and analytics for commercial real estate, CoStar has focused in recent years on creating a dominant presence in online real estate markets.
Source: Reuters
