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Highlights:
- Takeover Offer: CoStar has proposed a $4.20 per share cash offer, valuing Domain at $2.7 billion.
- Share Price Surge: Domain shares jumped over 50% to $4.76 in early trading.
- CoStar's Stake: The US-based company acquired 16.9% of Domain’s shares at the offer price.
- Uncertain Outcome: Domain’s board is reviewing the proposal, but no deal is guaranteed.
Shares of Domain Holdings Australia Ltd (ASX:DHG) skyrocketed over 50% to $4.76 in early trading on Friday after the company confirmed it had received a takeover proposal from CoStar Group, Inc. (NASDAQ:CSGP).
CoStar, a US$32 billion Nasdaq-listed real estate marketplace and analytics provider, has submitted an unsolicited, non-binding indicative proposal to acquire 100% of Domain’s issued capital via a scheme of arrangement.
Takeover Offer and Market Reaction
CoStar’s offer of $4.20 per share in cash represents a 34.6% premium to Domain’s last closing price. However, the proposed price will be adjusted for any dividends declared or paid before the deal's completion—excluding the 2-cent per share dividend announced last week.
Notably, CoStar has already acquired 16.9% of Domain’s shares at $4.20 per share on 20 February 2025, signaling its strong commitment to the takeover.
Despite the premium, Domain’s $2.7 billion valuation under the offer is still well below its 2021 market capitalization, when shares traded around $6.00.
What’s Next for Domain?
The Domain board has commenced an assessment of CoStar’s proposal. However, it has cautioned that there is no certainty that discussions will result in a formal transaction.
For now, shareholders are advised to take no action until further updates are provided. The deal's success depends on both parties reaching an agreed Scheme Implementation Agreement (SIA) on customary terms.
REA Group Shares Plunge in Response
The news has impacted REA Group Ltd (ASX:EA), Domain’s largest competitor, with its share price dropping over 13% to $230.96 during Friday’s trading session.
