Late last week, Domain Holdings Australia (ASX: DHG) shareholders received some good news. Costar Group Inc (NASDAQ: CSGP) agreed to buy Domain shares at a substantial premium.
Domain is an Australian digital property portal, best known for its website domain.com.au. It is the biggest competitor to REA Group Ltd (ASX: REA).
CoStar already owns 17% of Domain, which it acquired in February 2025 for $4.20. It will pay $4.43 for the remaining 83% of the business, valuing Domain at $3 billion.
This offer represents a 42% premium to Domain's stock price when CoStar first approached Domain on 21 February. CoStar initially offered $4.20 per share before lifting its bid to the current price on 27 March.
What is CoStar?
CoStar Group is a US real estate analytics provider founded in 1987 with a market capitalisation of $31 billion. In 2023, CoStar bid to acquire News Corporation's (ASX: NWS) Move business. News Corporation is the majority owner of REA Group.
Will the deal go through?
Domain shareholders are expected to vote on the offer in August. However, with the backing of both the company's board and its largest shareholder, Nine Entertainment Co Holdings Ltd (ASX: NEC), the deal is very likely to go through.
Commenting on the transaction, Domain Chair and Non-Executive Director Nick Falloon said:
The Domain Board has carefully considered the CoStar proposal and believes it represents compelling value and a high degree of certainty for Domain shareholders, through the cash offer and limited conditionality.
This proposal is an endorsement of the strong fundamentals of Domain, and we are confident this position will be further strengthened with CoStar's support.
Nine Entertainment owns 60.1% of the ordinary Domain shares outstanding. It intends to vote all of the Domain shares it holds in favour of the Scheme.
To get over the line, the Scheme requires the approval of more than 75% of votes cast by eligible shareholders and a majority of shareholders voting.
Has Domain been a good investment for shareholders?
Domain has been a very lucrative investment for Domain shareholders who invested at the beginning of the year. Domain shares are up 72% in 2025, significantly outpacing the S&P/ASX All Ordinaries Index (ASX: XAO), which is flat for the year.
However, zooming out, Domain shares are up 48% over the past 5 years. This trails the All Ordinaries Index, which has risen 52% over the same period.
