US property giant CoStar has made a $2.7 billion bid for Domain, sparking a surge in share prices and speculation about Nine Entertainment’s next move. The deal, however, faces regulatory hurdles and strategic considerations.
Figure 1: US real estate giant CoStar has placed a $2.7 billion offer for Domain, driving up share prices and fueling speculation about Nine Entertainment’s response. [Credit: Nine, DOMAIN, CoStar]
CoStar Acquires 16.9% Stake in Domain
The Group, a Nasdaq-listed real estate data giant valued at $51 billion, made a bold move on Thursday night. The company purchased a 16.9% stake in Domain at $4.20 per share, significantly higher than the previous closing price of $3.12.
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Domain, owned 60% by Nine Entertainment, confirmed it received an unsolicited, non-binding proposal for a full acquisition.
Market Reactions to the Takeover Bid
- Domain’s shares surged 37%, hitting $4.28.
- Nine Entertainment’s shares jumped4% to $1.69.
- REA Group’s shares dropped 10%, reflecting concerns over increased competition.
Bid Faces Regulatory and Strategic Challenges
Despite CoStar’s strong financial backing, the deal requires approval from the Foreign Investment Review Board (FIRB). This approval process has blocked major acquisitions in the past.
Additionally, Nine has not committed to selling. A spokesperson stated:
“Domain is of strategic importance to Nine’s media ecosystem and our long-term growth strategy. Nine will consider the proposal with a focus on the best interests of Nine shareholders.”
Why CoStar Wants Domain
The group expands aggressively into global real estate markets. The company already owns major platforms like:
- LoopNet
- com
- Ten-X
Domain would strengthen CoStar’s Australian presence, positioning it against market leader REA Group.
Potential Implications for Nine
Nine Entertainment must decide whether to cash out for over $1.5 billion or retain control of a key digital asset. The company recently created a marketplaces division to boost revenue from Domain and Drive. Acting CEO Matt Stanton previously stated:
“The creation of a marketplaces division will provide greater focus on Domain and Drive, ensuring we capitalise on value-creation opportunities across the group.”
Selling Domain would significantly alter Nine’s strategic direction.
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What Happens Next?
- Domain is reviewing CoStar’s proposal and appointing advisers.
- Nine will decide whether to accept or reject the bid.
- FIRB will evaluate the acquisition’s impact on Australian interests.
If approved, CoStar’s takeover would reshape the Australian real estate classifieds market. If rejected, Domain’s future remains uncertain, especially after CEO Jason Pellegrino’s exit in October.
Will Nine Sell or Hold?
Nine’s decision depends on whether it sees Domain as a long-term asset. While the bid offers a massive cash injection, Domain holds a strong market position, second only to REA Group.
The coming weeks will determine whether CoStar secures its Australian foothold or faces regulatory rejection.
