Ah, nothing quite stirs the real estate pot like a good ol’ cross-continental corporate takeover. In the latest episode of “Who Wants to Buy an Aussie?” U.S. online real estate heavyweight CoStar is gearing up to slap down a casual A$2.7 billion ($1.72 billion) for Domain Holdings, the property classifieds darling of Australia. Because apparently, there just aren’t enough overpriced homes and dodgy rental listings in America to keep them busy.
For those blissfully unaware, Domain Holdings (ASX: DHG) is about 60% owned by Nine Entertainment, the same folks who bring Aussies their daily dose of news, reality TV, and cricket. CoStar, on the other hand, is a Nasdaq-listed behemoth that probably owns more digital real estate than you’ll ever dream of affording in real life. And now, they want a slice of the Australian market pie. Or perhaps they just want the whole damn pie.
The Power Move Word on the street is that CoStar started buying up Domain stock at A$4.20 a share last Thursday, quickly gobbling up around 19% of the company. Why 4.20? Maybe someone at CoStar thought it was funny, or maybe they were just high on ambition. Either way, the term sheet leaked to Reuters shows they’re looking to make a full takeover at that price, a spicy 34.6% premium to Domain's closing share price of A$3.12. Not bad for a day’s work, eh?
Naturally, CoStar is playing it cool and declined to comment. Domain, too, is keeping mum, possibly still reeling from the realization that their stock is suddenly as desirable as avocado toast at a millennial brunch. Nine Entertainment, the media overlord, also remained silent—no doubt drafting a reality show pitch titled “The Real Estate Wars.”
Why Does CoStar Even Want Domain? Good question. Why would an American real estate giant care about an Aussie property classifieds site? Well, when you’ve had your fill of Zillow and Redfin and still have a few billion lying around, you might as well diversify. Plus, Domain isn’t exactly a slouch—last week, they reported a 28.3% rise in half-year profit (to A$33.1 million) and a 7.4% bump in revenue (to A$217.2 million). Numbers like that will make any acquisitive CEO's heart go pitter-patter.
What’s Next? Assuming CoStar’s bid moves forward, it’ll be interesting to see how this plays out. Will Nine Entertainment cash out and take their millions to fund the next season of “Married at First Sight”? Will CoStar attempt to Americanize Domain, turning it into some Zillow-esque Frankenstein’s monster? Or will Aussie regulators step in and put a kibosh on the whole thing, leaving CoStar to lick its wounds and return to the safety of U.S. soil?
Whatever happens, this corporate chess match is bound to serve up drama, intrigue, and more than a few eye-rolls. Stay tuned—it’s going to be a wild ride.
