By Himanshi Akhand and Rishav Chatterjee
(Reuters) – US real estate company Costar will acquire the domain for $3 billion ($1.92 billion) including debt, the Australian real estate listing platform said Friday to create a properly capitalized rival for News Corp’s Rea.
After weeks of due diligence by CoSTar, which owns a 16.9% stake in the domain, the company agreed to a US company’s $4.43 offer.
The domain’s shares reached $4.47 from 5.2%, set at its biggest day rise in nearly a month.
The domain’s largest shareholder, media company Nine Entertainment, has expressed support for the transaction and will receive $1.4 billion for a 60.1% stake. The nine shares also reached $1.61, 8.1%.
Costar acquired a 16.9% stake in the domain on February 21st. This was raised after the initial acquisition offer of $4.20 each. The acquisition will be voted on shareholders in mid-August.
Jesse Moors of Spatium Capital Portfolio Manager said that the Australian Foreign Investment Review Board is looking at how Australian citizens’ residential housing data considers the sovereignty risks owned by American real estate companies.
Nine, who owns popular newspapers such as The Age and Arys financial reviews, has failed to match the domain with the successes News Corp-Controld rival Rea enjoyed.
Rea’s market value has reached $331.6 billion after jumping more than 160% since 2020.
The domain is currently valued at $26.9 billion.
REA’s shares fell to 4.2%, set at its largest one-day loss since early April.
“We don’t expect it to have a significant impact on REA’s position over the next 1-3 years. We look forward to the first expansion of our marketing schedule, especially if Rea’s product runs and CoSTar succeeds in growing the audience for the domain,” Citi analysts said.
Originally a commercial real estate information and analytics provider, CoSTar has shifted its focus in recent years to building a dominant presence in the online real estate market.
($1 = 1.5659 Australian dollars)
(Reporting by Himansh Akhand and Rishav Chatterjee of Bengaluru, edited by Rashmi Eich)
