Domain Faces Ownership Shift Amid $3 Billion CoStar Buyout
Domain Holdings Australia has agreed to a $3 billion acquisition by CoStar Group, offering shareholders $4.43 per share and a potential special dividend, with strong board and major shareholder backing.
- Binding Scheme Implementation Deed signed with CoStar Group
- Cash consideration of $4.43 per Domain share, less any special dividend
- Transaction values Domain at an implied enterprise value of $3.0 billion
- Domain Board unanimously recommends the Scheme, subject to conditions
- Nine Entertainment, majority shareholder, supports the Scheme
Deal Details and Premiums
Domain Holdings Australia Limited (ASX: DHG) has entered into a binding Scheme Implementation Deed with CoStar Group, Inc. (NASDAQ: CSGP) to acquire all remaining shares of Domain not already held by CoStar's subsidiary, Andromeda Australia SubCo Pty Limited. The agreed cash consideration stands at $4.43 per share, subject to adjustment for any special dividend declared or paid by Domain after the announcement date.
This offer values Domain at an implied enterprise value of approximately $3.0 billion, representing a significant premium of 42% over the undisturbed share price prior to the initial bid announcement. The premiums extend to 50.2% and 59.7% relative to the one-month and three-month volume weighted average prices, respectively, underscoring the attractiveness of the proposal for Domain shareholders.
Board and Shareholder Support
The Domain Board has unanimously recommended shareholders vote in favour of the Scheme, contingent on the absence of a superior proposal and a positive opinion from an Independent Expert confirming the Scheme is in shareholders' best interests. Domain’s majority shareholder, Nine Entertainment Co. Holdings Limited, which holds 60.1% of Domain’s shares, has also indicated its intention to support the Scheme under the same conditions.
Domain Chair Nick Falloon highlighted the compelling value and certainty the proposal offers, emphasizing the strong fundamentals of Domain and the confidence in CoStar’s backing to further strengthen the company’s position.
Special Dividend and Tax Considerations
In addition to the cash consideration, the Domain Board may declare a fully franked special dividend of up to $0.10 per share, subject to franking credit availability. This dividend could provide eligible shareholders with franking credits valued up to $0.04 per share, enhancing the overall return. The payment and quantum of this dividend remain at the Board’s discretion and will be subject to tax advice and regulatory approvals.
Conditions and Next Steps
The Scheme is subject to customary conditions including Domain shareholder approval, court approval, Foreign Investment Review Board (FIRB) clearance, and the absence of any material adverse changes. The Scheme Meeting is expected to be held in mid-August 2025, with the Scheme Booklet and Notice of Meeting to be dispatched to shareholders in early July. Implementation of the Scheme is anticipated in the third quarter of 2025, pending satisfaction of all conditions.
Domain is advised by UBS Securities Australia Limited and Gilbert + Tobin, while CoStar is represented by Corrs Chambers Westgarth.
Bottom Line?
As Domain moves toward a potential $3 billion acquisition, shareholder and regulatory approvals will be pivotal in shaping the company’s next chapter.
Questions in the middle?
- Will any competing bids emerge before the shareholder vote in August?
- How will the potential special dividend impact shareholder returns and tax outcomes?
- What are the implications for Domain’s strategic direction under CoStar ownership?
