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Highlights
- CoStar raises takeover bid for (DHG) by 5.5%
- The new bid offers a significant 42% premium over recent closing prices
- Unanimous board support for CoStar's revised proposal
Domain Holdings Australia Ltd (ASX:DHG), a major player in Australia's property portal market, has recently become the subject of a heightened takeover bid by US-based CoStar. This revised bid now stands at $4.43 per share, marking a 5.5% increase from the initial offer of $4.20, announced earlier in February.
The new proposal represents a substantial 42% premium over the closing price of (DHG) shares on February 20, 2025, highlighting the potential value CoStar sees in acquiring the second-largest property portal in Australia. This offer is described as "best and final" in the absence of any competing bids and could further include an additional benefit through franking credits. Domain suggests that these credits could potentially unlock up to $0.04 per share if a special dividend is distributed, although this would reduce the cash component of CoStar's offer correspondingly.
The bid from CoStar comes with several conditions, including a unanimous recommendation from (DHG)'s board and the signing of an exclusivity and process deed. Following the receipt of the increased offer, Domain's board, in consultation with its major shareholder Nine Entertainment Co Holdings Ltd (NEC), has agreed to engage further with CoStar by granting them due diligence access. This move indicates a proactive approach by Domain’s board to potentially bring this offer to fruition.
While the shareholders of Domain have been advised not to take any immediate action, the board’s unanimous decision to entertain this new offer shows a clear openness to negotiation. Domain has committed to keeping its shareholders updated as more details emerge and as the discussions with CoStar progress.
This development is particularly significant in the context of the global property portal market, where consolidations are increasingly common as companies seek to leverage extensive real estate listings to drive revenue. For CoStar, acquiring Domain would mean a stronger foothold in the Australian market, complementing its existing portfolio of property-focused services.
The raised offer from CoStar not only reflects the inherent value seen in Domain’s operational capabilities and market position but also signals potential shifts in the dynamics of the international property portal landscape. As negotiations continue, the outcome of this proposed takeover will undoubtedly be of great interest to shareholders and market watchers alike.
