CoStar, the $50 billion Nasdaq-listed company, has already secured a 17 per cent stake in Domain, purchasing shares at $4.20 each through Macquarie Capital according to the AFR.
The move sent Domain’s shares soaring 37 per cent to $4.28, while parent company Nine Entertainment saw its shares climb 21 per cent.
Nine Entertainment, which controls 60 per cent of Domain, acknowledged the importance of the property platform to its business.
“Domain is of strategic importance to Nine’s media ecosystem and our long-term growth strategy,” Nine stated in response to the bid.
The takeover bid comes at a crucial time for Domain, which recently appointed Greg Ellis as interim chief executive.
Under his leadership, the company has shown strong performance, with earnings rising 14 per cent to $77.8 million in the six months to December 31, while profit increased 28 per cent to $33.1 million.
CoStar’s track record suggests ambitious plans for Domain if the acquisition succeeds.
The company has demonstrated its aggressive growth strategy through previous acquisitions, including the UK portal OnTheMarket and 3D property mapping service Matterport.
Industry experts are watching closely as CoStar may implement a similar strategy to its successful transformation of Homes.com, where it invested $1 billion in sales and marketing to elevate the platform’s market position.
The Domain board has begun evaluating the proposal, though they said that the deal would require Foreign Investment Review Board approval.
“The Domain board has commenced an assessment of the CoStar Proposal,” the company stated in its ASX announcement.
“Domain is of strategic importance to Nine’s media ecosystem and our long-term growth strategy. Nine
will consider the proposal with a focus on the best interests of Nine shareholders.”
