The American rental portal operator RentPath has announced that it is to drop the deal that would have seen rival CoStar buy out the floundering company for some $587 million in the face of an antitrust lawsuit filed by the Federal Trade Commission earlier this month. The all-cash offer would have seen US commercial real estate giant CoStar take on RentPath portals Rent.com and ApartmentGuide.com, a scenario deemed to be detrimental to competition in the rental market as CoStar already owns and operates the rental portals Apartments.com, ApartmentFinder.com and ForRent.com.
While the disintegration of the deal is bad news for CoStar, which has signalled its intent to move further into residential real estate with the purchase of Homesnap earlier in the year, it may yet prove to be catastrophic for RentPath which was in the process of filing for bankruptcy prior to CoStar’s offer. The Atlanta based company’s bankruptcy plans reportedly remain in place with the backing of lenders and the assistance of an experienced asset management team.
Now that CoStar’s takeover bid for RentPath has been foiled, the companies will go back to treating each other as rivals: Yesterday afternoon CoStar-owned rental portal Apartments.com was boldly claiming on LinkedIn that it had surpassed 1 billion users for the year.
It seems that although CoStar’s purchase of Homesnap successfully ran the antitrust gauntlet earlier this month, the same antitrust rhetoric coming out of Washington that has been alarming the big silicon valley tech companies recently has been shown to have some teeth. One other deal which CoStar CEO Andy Florance has said his company is keen to get over the line which may also fall foul of the FTC is a mooted takeover of commercial real estate company CoreLogic which, if it went ahead, would see CoStar build on its already formidable position in the commercial sector.