CoStar Pays $52 for Failed RentPath Deal and Admits Defeat in Pursuit of CoreLogic

March 5, 2021
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CoStar finally admitted defeat in its protracted pursuit of fellow publicly listed US data giant CoreLogic yesterday afternoon. After a long courtship that saw CoStar's original bid of $6.7 billion rejected by CoreLogic's board in favour of a bid of around $6 billion from private equity firms Stone Point Capital and Insight Partners followed by an 11th-hour upping of CoStar's bid and assurances of safe passage through FTC scrutiny, CoreLogic yesterday rejected the new bid and CoStar released a statement saying it would no longer pursue the deal.

Despite the superior figure attached to CoStar's bid, CoreLogic's board were not convinced on three key points according to a letter to CoStar from the company's CEO Frank Martell:

"The CoreLogic Board unanimously believes your Updated Proposal requires further improvement with respect to the following key areas: (i) value, (ii) certainty of value, and (iii) certainty of closing in a timely manner"

CoStar's share price has dropped significantly since it made its offer meaning that despite a larger headline figure than that of its rival bidder, the company's bid proposal represented what Martell called "significantly lower total per share value".

Despite CoreLogic's letter admitting the "strategic potential" of a CoStar deal and asking the Washinton based company to come again with an improved offer, CoStar released a statement late on Thursday saying that it would no longer pursue the deal. Citing rising mortgage rates, CoStar CEO Andy Florance brought an end to an acquisition saga that has generated plenty of headlines and leaves a potentially very important deal for CoStar in the rearview mirror:

"now is not the time for us to aggressively buy into the residential mortgage market"

In other news around a failed CoStar deal, it has also come to light that the company has come to an agreement with RentPath to pay a $52 million break-fee which represents 88% of the original break fee agreed before the deal was broken up by the FTC in December. CoStar had a bid of $587 million accepted for the failing rental portal operator, but ultimately the competition authorities in the US deemed that if the deal were to be allowed to go ahead, CoStar would not face strong enough competition in the rentals space with RentPath portals and as well as those already owned by CoStar (, and being under single ownership.

The story behind the breakup of the deal for RentPath was laid out by Florance on a recent earnings call and reportedly involved the mooted entrance into residential real estate of a household name tech giant as well as Zillow.

March 5, 2021
Edmund got to know the world of portals and marketplaces working at Mitula Group (which became Lifull Connect after the buyout in 2018). He worked directly with hundreds of portals across the world in his role in the content department for three and a half years before transferring to the SEO department to understand the inner workings of listings sites. He joined Online Marketplaces as Head of Content in March 2020.

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