The Domain Holdings Australia Ltd (ASX: DHG) share price is jumping higher after receiving a takeover bid from CoStar Group.
Domain operates the second largest property portal in Australia.
Domain receives a big takeover bid
The property portal business announced that it has received a non-binding indicative proposal from CoStar Group to acquire all of Domain for $4.20 per Domain share.
The offer is a 100% cash and the proposed price would be reduced by any dividends declared or paid by Domain before completion of the transaction, other than the $0.02 per share dividend announced on 13 February 2025.
CoStar told Domain that it acquired 16.9% of the ASX share on 20 February 2025 at $4.20 per Domain share.
The proposal is conditional on a number of normal terms including there being no material adverse change to the business (including prospects or financial performance), the completion of satisfactory due diligence (for which it has requested exclusivity), unanimous approval of the Domain board of directors and approval by CoStar.
The offer is also expected to need approval from the Foreign Investment Review Board (FIRB).
Who is CoStar? It’s a publicly traded business on the NASDAQ Exchange. It describes itself as a leading provider of online real estate marketplaces, information and analytics. It owns and operates residential and commercial marketplaces in the US.
What is the early response?
The Domain board said it has started an assessment of CoStar’s proposal, but noted that shareholders don’t need to take any action about the offer at this stage and there is no certainty that the proposal will result in a transaction.
Final thoughts on the Domain share price
Interestingly, the company’s share price has risen 43% to $4.46 in early trading – stronger than the initial bid. Investors may be expecting a stronger bid in the future from CoStar to get across the line, or that a competitor could come in as well.
It’d be speculative to invest at this price, but it’s exciting for existing shareholders. It’ll be interesting to see what happens next.
