U.S. real-estate advertiser and analytics provider CoStar has made a bid for Domain Holdings (DHG), offering $1.68 billion, equivalent to $4.20/sh, a 35% premium to last. The stock traded 40% higher today on the expectation that major shareholder Nine (NEC), who owns 60% of DHG, will likely want more. Nine put out a statement today suggesting the important of DHG to its longer term strategy, which is a sensible way of saying they want a better price.
Nine shares closed up 20% today factoring in the bid. If a deal was to go ahead, NEC would have a lot of cash to do something with. Further, REA Group (REA) fell 11% on the prospect of a rejuvenated competitor at an point in their history where they are also looking for a new CEO.
- We own NEC in the Emerging Companies Portfolio.
MM expects more to play out with the DHG bid
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