Domain Valued Between $4.06-$4.46; CoStar’s $4.43 Offer Near Top End

Background and Offer Details

Domain Holdings Australia Limited (ASX – DHG), a leading Australian digital property marketplace, has announced a definitive scheme of arrangement to be acquired by US-based CoStar Group, Inc. through its subsidiary Andromeda Australia SubCo Pty Limited. The offer price is $4.43 per share in cash, representing a significant premium over Domain’s undisturbed trading prices prior to the initial proposal.

The scheme consideration values Domain at an implied enterprise value of approximately $3.0 billion, reflecting a premium of 42% to the last closing price before the initial offer and up to nearly 60% compared to three-month volume weighted average prices. This premium is notably above typical control premiums seen in Australian takeovers, underscoring the strategic value CoStar places on Domain’s position in the Australian property market.

Board and Shareholder Support

The Domain Board has unanimously recommended that shareholders vote in favour of the scheme, subject to the absence of any superior proposal and the Independent Expert maintaining its positive conclusion. Each director has committed to voting their shares in favour of the scheme.

Supporting this recommendation, Nine Entertainment Co. Holdings Limited, Domain’s controlling shareholder with a 60.05% stake, has confirmed its intention to vote all its shares in favour of the scheme under the same conditions. This backing from the majority shareholder provides a strong foundation for the scheme’s approval.

Independent Expert’s Assessment

Grant Samuel & Associates Pty Limited, the Independent Expert appointed by Domain, has concluded that the scheme is fair and reasonable and in the best interests of Domain shareholders (excluding CoStar and its associates). Their valuation places Domain’s underlying value between $4.06 and $4.46 per share on a fully diluted basis, with the offer price sitting near the top of this range.

The expert’s valuation is based on a detailed discounted cash flow analysis and earnings multiples comparison, taking into account Domain’s market position as the number two digital property marketplace in Australia, its growth prospects, and the competitive landscape dominated by REA Group.

Scheme Mechanics and Key Dates

The scheme meeting is scheduled for 10 – 00am (AEST) on 4 August 2025 and will be held in a hybrid format, allowing shareholders to participate in person or online. To be eligible to vote, shareholders must be registered as of 7 – 00pm (AEST) on 2 August 2025.

Subject to shareholder and court approval, the scheme is expected to become effective on 7 August 2025, with implementation and payment of the scheme consideration anticipated by 27 August 2025. Domain shares will be suspended from trading on the ASX at the close of trading on the effective date, with delisting to follow shortly thereafter.

Additionally, the Domain Board intends to declare a fully franked special dividend of up to 8.8 cents per share, payable prior to scheme implementation. This dividend will reduce the cash component of the scheme consideration accordingly. Certain shareholders may benefit from franking credits attached to this dividend, subject to individual tax circumstances and pending final rulings from the Australian Taxation Office.

Post-Acquisition Intentions and Risks

CoStar has expressed its intention to continue operating Domain largely as it currently functions, with plans to appoint its nominees to the Domain Board and retain existing employees where commercially appropriate. The acquisition aligns with CoStar’s strategy to expand its footprint in real estate marketplaces globally, leveraging its technology and scale to grow Domain’s business in Australia.

However, risks remain should the scheme not proceed, including potential share price volatility, exposure to market and operational risks inherent in Domain’s business, and the absence of a comparable or superior proposal. Shareholders are advised to consider these factors alongside the tax implications and the certainty of value offered by the scheme.