Domain seals $3b CoStar takeover as Nine backs deal, flags special dividend
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More news: Domain and Nine shares rose in early trading after CoStar and Domain announced an agreement to put a deal valuing the Australian real estate platform at $3 billion to shareholders later this year.
Shares in Domain were 2.71% higher at $4.36 at 10:38am AEST, while shares in Nine were up 3.69% to $1.54.
Nine flags special dividend should Domain deal close as expected
More news: Nine Entertainment has flagged it intends to prioritise paying a portion of the $1.4 billion in proceeds it secures from CoStar’s Domain takeover back to shareholders by way of a fully franked special dividend.
The company said it could pay a special dividend in the range of 47 to 49 cents per share, though a final decision will not be made until the deal is completed and finalised. The special divided would be paid on top of any dividend Nine declares for the 2025 financial year, the company said Friday.
What they said: “If the transaction completes, Nine will continue to be Australia’s largest locally owned media company with a unique portfolio of assets across streaming and broadcast television, radio, publishing, digital and data,” the company said in a release to the market.
“Having a strong and flexible balance sheet will also position Nine well to assess further value-accretive capital management initiatives and disciplined strategic investment opportunities (both organic and inorganic). Further details of Nine’s strategic priorities and future capital management initiatives will be provided in due course.”
Domain seals $3b CoStar takeover as Nine backs deal
The news: Domain has entered into a binding scheme implementation deed with CoStar to acquire 100% of the company, the digital real estate company announced on Friday.
The numbers: The announcement comes after CoStar in March lobbed a best and final bid for Domain, which has been controlled by Nine Entertainment with a 60% stake since its 2018 merger with Fairfax Media, offering $4.43 a share.
Domain said the board may declare and pay a fully franked special dividend of up to $0.10 per share subject to the availability of franking credits. If paid, eligible shareholders could secure franking credits of up to $0.04 per share.
The deal gives Domain an implied enterprise value of $3 billion, the company said Friday.
The context: Domain's board unanimously recommended that its shareholders vote in favour of the scheme in the absence of a superior proposal, and subject to an independent expert concluding that the scheme is in the best interests of shareholders.
Nine has advised Domain that it intends to vote in favour of the scheme subject to these qualifications, Domain said in its announcement.
Domain said it expects the deal to be completed in the third quarter of 2025, subject to customary approvals.
What they said: “The Domain board has carefully considered the CoStar proposal and believes it represents compelling value and a high degree of certainty for Domain shareholders, through the cash offer and limited conditionality,” Domain chair Nick Falloon said in a statement.
“This proposal is an endorsement of the strong fundamentals of Domain, and we are confident this position will be further strengthened with CoStar’s support.”
CoStar founder and chief executive Andy Florance said he was pleased to reach an agreement with Domain and to secure Nine’s support.
“As one of the first and most experienced digital real estate companies in the world, CoStar Group brings a proven track record of building high-traffic online marketplaces that deliver real value,” Florance said in a statement.
“With our technology, scale, and the innovation we’re known for, we see a tremendous opportunity to enhance the Australian property market. By combining Domain’s deep expertise with our global experience and best practices, we will build a more compelling user experience at a lower cost — driving greater value for agents, vendors, and home buyers.
“We will also create value for our customers globally by incorporating Domain’s learnings and best practices into our marketplaces outside of Australia. We are confident this acquisition will foster more competition in Australia.”
The source: ASX announcement
