In a letter to CoreLogic shareholders, Andy Florance, CEO of the CoStar Group, outlines a “superior” proposal to outperform private equity bidders.
Just two weeks ago, the CoStar Group seemed unable to buy real estate data and analytics giant CoreLogic, which was apparently sold to two private equity firms for $ 6 billion.
Andy Florance, CEO of CoStar Group, enlivened his company’s efforts to acquire the company on Tuesday in a letter to CoreLogic shareholders announcing the CoStar Group’s new offer to purchase CoreLogic valued at nearly $ 7 billion -Dollars set out which equates to a price of $ 95.76 per share.
“Given our huge commitment since early December, we were stunned to read about the acquisition of CoreLogic by Stone Point Capital and Insight Partners on February 4, 2021,” wrote Florance. “Their cash bid of $ 80 per share was significantly lower than our last all-stock offering, which was $ 86.30 per share.”
“The decision to accept the lower bid of $ 80 per share from a sponsor indicates that the synergies of our proposal as a strategic bidder are not being adequately evaluated.”
CoreLogic shares closed Monday’s trading day at $ 81.99, above the price Stone Point Capital and Insight Partners agreed to acquire for CoreLogic.
The transaction is still pending shareholder approval, and the companies initially estimated it would close in the second quarter of 2021.
“The fact that CoreLogic stock continues to trade well above the outstanding transaction price is a clear indication that shareholders agree,” wrote Florance. “Accordingly, we propose advancing an acquisition of CoreLogic that will offer CoreLogic shareholders direct value that is substantially superior to what they would receive in the pending transaction.”
Florance believes that CoStar’s competing proposal offers CoreLogic shareholders “superior value” and that there is a “strong strategic rationale” for combining the two companies.
CoreLogic offers a variety of multiple listing services and real estate data products, including the popular Matrix digital MLS platform.
CoStar has moved deeper into the residential real estate space in the past few months, first with the acquisition of Homesnap and more recently with the acquisition of Houses.com. Florance spoke about the company’s plans to launch a home search website during an appearance on Inman Connect last month.
CoStar already has an enormous presence in both commercial real estate and rental space. Auction.com and Apartments.com are among the company’s largest properties.
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