Online property listing company Domain’s board has fully backed the $2.8 billion bid lobbed by US digital real estate listings giant CoStar Group, potentially paving the way for a big payday for majority shareholder Nine Entertainment.
On Monday, Domain told investors that it had granted CoStar exclusive access to conduct due diligence after the US suitor put forward a sweetened $4.43 a share offer last week.
The board of Nine’s majority-owned Domain has backed a takeover bid.Credit: Sam Mooy
Nine, the owner of this masthead, has a 60 per cent stake in Domain and has been supportive of Domain’s management opening its books to the US firm.
CoStar lobbed an initial bid worth $4.20 per Domain share on February 20, then revised its offer to $4.43 last week after the company’s chief executive, Andrew Florance, touched down in Sydney.
Florance met with Nine chief executive Matt Stanton, who is also on Domain’s board, as well as other company executives during his visit. Stanton and fellow Nine directors Peter Tonagh and Mickie Rosen represent the company on Domain’s board.
CoStar said on Thursday that the latest offer was its best and final.
The deal, if it goes through, will vastly alter the profile of Nine, the largest Australian-owned company in the market. Nine owns The Sydney Morning Herald, The Age and The Australian Financial Review as well as streaming platform Stan and broadcast television and radio assets.
It will also require approval from the Foreign Investment Review Board, part of the Treasury, which is now in caretaker mode after a federal election was called on Friday by Prime Minister Anthony Albanese.
With Nine’s stake in Domain worth about $1.7 billion, the company is expected to deliver a healthy dividend to shareholders, pay down some debt and reinvest in its digital growth areas, streaming and publishing with the remaining cash, said senior company sources not authorised to speak publicly.
