The US-based property group CoStar has improved its takeover offer for Australian real estate classified site Domain, 60% owned by Nine Entertainment.
The cash offer is now $4.43 per Domain share, up 5.5% from the original $4.20, valuing the company at more than $2.8 billion.
The offer represents a 42% premium to the closing share price of Domain on February 20, the last trading day before CoStar’s original proposal.
Nine calculates that it would receive about $1.4 billion, net of capital gains tax, from the improved deal.
CoStar says its $4.43 per share is its best and final offer in the absence of a competing proposal.
The Domain board of directors unanimously decided to allow due diligence with CoStar after signing a confidentiality agreement.
Domain reported last month a 7.4% lift in revenue to $217.2 million for the half year to December, and net profit was up 28% to $33.1 million.
Then the company said it was strengthening collaboration with Nine, with cross platform branding opportunities during the recent Australian Open.
“We have also leveraged the power of Nine in the launch of a Victorian edition of Prestige magazine,” Domain said.
Nine reported a slide in profit in a challenging advertising market with revenue up just 1% in the six months to December.
Revenue was $1.39 billion for the half year, while net profit after tax fell 25% to $112.2 million.
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