Domain Shareholders Approve CoStar Acquisition

Shareholders in Domain Holdings Australia Ltd have voted in favour of an acquisition offer by CoStar Group, in an effectively unanimous decision that will see ownership transferred to CoStar as soon as this week.

An overwhelming 99.98% of votes cast accepted CoStar's pre-agreed premium of AUD4.43 (USD 2.95) per Domain share, in a deal worth AUD 3 billion (USD 1.92 billion).

The result of the vote will see the trade of Domain shares suspended before the acquisition closes. The shareholder vote was approved by the Supreme Court of New South Wales in June.

The acquisition, which will see the American real estate data giant expand its footprint to a new continent, is a multifaceted endeavour. A continent's worth of real estate data, a homebuying audience conditioned to fund the marketing of their own property, a market leader Florance previously described as "unsustainable", and an underperforming rival with major room for growth.

Somewhere in this equation, Florance believes, there is significant shareholder value to be created, and the war of words is already heating up with strong comms coming out of both sides of the battlefield. A source close to CoStar told Online Marketplaces that the Group believes it can turn Domain into a market leader in Australia, while News Corp CEO Robert Thomson hit the media circuit to tell the press, "We have the advantage."

It also appears that CoStar's plans for the next stage of its Australian endeavour are well underway. Jason Pellegrino, previously ousted as CEO, is expected to return to oversee CoStar's transition, with interim CEO Greg Ellis set to step down after six months.

Meanwhile, a rebrand could be on the cards after CoStar spent nearly $15 million on the Homes.com.au domain name. A full-scale renaming seems unlikely given Domain's stature in Australia—it is older than realestate.com.au—but a challenger portal could be an enticing experiment.

Andy Florance told the Australian Financial Review:

"[Homes] is a clear, strong and memorable URL. Owning the brand gives us the optionality to go to market with flanking brands or to make a big statement with a major rebrand. Our goal is to give vendors and agents more value for their investment and buyers a more enjoyable experience."

The Domain deal is the latest chapter in Andy Florance's aggressive M&A strategy, following high-profile deals for OnTheMarket in the United Kingdom and, most recently, the digital twin specialist Matterport.