Revised Proposal Adds $450 million ($6.00 per
share) in Cash to Previous All-Stock Offer
CoStar Accepts Antitrust Covenant Proposed by
CoreLogic
Revised Proposal Equates to over $1.25 Billion
Improvement over Stone Point and Insight Offer
CoStar Expects CoreLogic Board to Deem New
Proposal “Superior” within 48 Hours
Today, CoStar Group, Inc. (NASDAQ: CSGP) delivered a letter to
the Board of Directors of CoreLogic (NYSE: CLGX) setting forth the
terms of a revised proposal by CoStar Group to acquire 100% of the
equity interests of CoreLogic. Under the terms of the new proposal,
CoreLogic shareholders would receive $6.00 per share in cash and
0.1019 shares of CoStar Group common stock in exchange for each
share of CoreLogic common stock, representing a value of
approximately $90 per share based on CoStar Group’s closing share
price on February 26, 2021 and approximately $97 per share based on
the latest 30-day volume-weighted average CoStar share price. The
new offer represents a $17 per share improvement over the Stone
Point and Insight offer, which is equivalent to over $1.25 billion
more in aggregate value. The Stone Point and Insight offer now
represents a 6% discount to CoreLogic’s latest closing price of
$84.66, while the CoStar Group offer represents a 15% premium and
implies pro forma diluted ownership of approximately 16.2% in the
combined entity and $450 million in cash for current CoreLogic
stockholders.
The following is a copy of the letter that CoStar Group
delivered to the Board of Directors of CoreLogic on March 1,
2021:
Dear CoreLogic Board Members:
We write to provide you with updated terms of a negotiated
transaction, which we are confident constitute a “Superior
Proposal” under your existing agreement with Stone Point Capital
and Insight Partners (the “SPC Agreement”). Since your announcement
of the SPC Agreement and our previous letter to you on February 16,
2021, your stock price has remained well above the SPC Agreement’s
$80 per share price. Clearly, your stockholders are holding firm to
their support for a transaction between our two companies over the
SPC Agreement.
CoStar Group is committed to moving forward with such a
transaction. Set forth below are our revised key terms since our
February 16th letter, addressing all of your issues. We will
separately send you and your legal advisors a version of the merger
agreement memorializing the terms below. We are prepared to sign
that version immediately.
We expect the CoreLogic Board to deem this proposal to be a
“Superior Proposal” within 48 hours.
Consideration: We propose a merger transaction whereby
CoStar would acquire 100% of the equity interests of CoreLogic in a
stock and cash transaction. CoreLogic shareholders will receive
0.1019 shares of newly issued CoStar common stock and $6.00 in cash
for each share of CoreLogic’s issued and outstanding common stock.
This implies a headline value of $90 per share based on CoStar’s
latest closing share price and $97 per share based on the latest
30-day volume-weighted average CoStar share price. Further, this
offer represents over $1.25 billion more in aggregate value or a
$17 per share improvement over the SPC Agreement. The SPC Agreement
now represents a 6% discount to CoreLogic’s latest closing price of
$84.66, while our offer represents a 15% premium (and a 21% premium
to the SPC offer of $80/share) and implies pro forma diluted
ownership of approximately 16.2% in the combined entity and $450
million in cash for current CoreLogic stockholders.
Antitrust Covenant and Timing: We continue to believe
that the proposed combination is pro-competitive, and as such, does
not present any meaningful antitrust concerns. Accordingly, we will
agree to an antitrust covenant that we will take all actions to
obtain the required antitrust approvals up to a material adverse
effect on the combined company.
We understand that certainty of closing is a key concern for the
CoreLogic Board. Additional time and flexibility to extend the
Termination Date are therefore crucial to reducing risk that the
deal does not close as a result of failure to obtain antitrust
clearance. In a deal such as this one with no horizontal
competition concerns, the single most important contractual
provision for ensuring certainty of close is ample time to seek
regulatory clearance, including time to negotiate with and/or
litigate against regulatory authorities.
We now propose to set the initial Termination Date at six months
– the same as in the SPC Agreement. To ensure a successful close,
we need the ability to extend the Termination Date for an
additional 6-month and 3-month period, if required, to resolve any
remaining hurdles to antitrust clearance.
Payment of Pending Termination Fee: We will agree to
advance payment of the $165 million termination fee payable under
the SPC Agreement.
Diligence Cooperation Efforts: We will agree to not sell
assets or “shop” parts of the business prior to the closing and
will limit such covenant to be only applicable in furtherance of
the required antitrust obligations. To be clear, CoStar would only
have the ability to have such discussions in order to satisfy the
higher antitrust covenant that we are now accepting.
Intervening Event at CoStar: We will agree to a
formulation that allows the CoreLogic Board to consider all
criteria that the law requires it to consider. This, combined with
the “Material Adverse Event” closing condition already in our
proposal and your stockholder vote, is more than sufficient to
provide necessary comfort for the exercise of any fiduciary
duties.
Conclusion
Our response conclusively constitutes a “Superior Proposal”
under the terms of the SPC Agreement. We are confident that after
consultation with your outside legal counsel and financial advisors
and considering all legal, regulatory and financing aspects that
you deem appropriate, that our revised proposal described herein is
more favorable, from a financial point of view, to CoreLogic’s
stockholders than the transactions contemplated by the SPC
Agreement.
We look forward to your response.
Sincerely,
Andrew C. Florance Chief Executive Officer CoStar Group,
Inc.
About CoStar Group, Inc.
CoStar Group, Inc. (NASDAQ: CSGP) is the leading provider of
commercial real estate information, analytics and online
marketplaces. Founded in 1987, CoStar conducts expansive, ongoing
research to produce and maintain the largest and most comprehensive
database of commercial real estate information. Our suite of online
services enables clients to analyze, interpret and gain unmatched
insight on commercial property values, market conditions and
current availabilities. STR provides premium data benchmarking,
analytics and marketplace insights for the global hospitality
sector. Ten-X provides a leading platform for conducting commercial
real estate online auctions and negotiated bids. LoopNet is the
most heavily trafficked commercial real estate marketplace online.
Realla is the UK’s most comprehensive commercial property digital
marketplace. Apartments.com, ApartmentFinder.com, ForRent.com,
ApartmentHomeLiving.com, Westside Rentals, AFTER55.com,
CorporateHousing.com, ForRentUniversity.com and Apartamentos.com
form the premier online apartment resource for renters seeking
great apartment homes and provide property managers and owners a
proven platform for marketing their properties. Homesnap is an
industry-leading online and mobile software platform that provides
user-friendly applications to optimize residential real estate
agent workflow and reinforce the agent-client relationship. CoStar
Group’s websites attract tens of millions of unique monthly
visitors. Headquartered in Washington, DC, CoStar maintains offices
throughout the U.S. and in Europe, Canada and Asia with a staff of
over 4,600 worldwide, including the industry’s largest professional
research organization. For more information, visit
CoStarGroup.com.
Forward-Looking Statements
This communication contains forward-looking statements within
the meaning of the federal securities law that are not historical
or current facts. Such statements are based upon current plans,
estimates and expectations that are subject to various risks and
uncertainties. The inclusion of forward-looking statements should
not be regarded as a representation that such plans, estimates and
expectations will be achieved. Words such as “anticipate,”
“expect,” “project,” “intend,” “believe,” “may,” “will,” “should,”
“plan,” “could,” “target,” “contemplate,” “estimate,” “predict,”
“potential” and words and terms of similar substance used in
connection with any discussion of future plans, actions or events
identify forward-looking statements. All statements, other than
historical facts, including statements regarding the ultimate
outcome of discussions between CoStar Group and CoreLogic,
including the possibilities that CoStar Group will not pursue a
transaction with CoreLogic or that CoreLogic will reject a
transaction with CoStar Group; the ability of the parties to
complete a transaction when expected or at all; the risk that the
conditions to the closing of any proposed transaction, including
receipt of required regulatory approvals and approval of
CoreLogic’s stockholders, are not satisfied in a timely manner or
at all; potential litigation related to any proposed transaction;
the expected benefits of any proposed transaction, such as expected
cost, EBITDA, Adjusted EBITDA and/or revenue synergies, the
accretive nature of the transaction or expected adjusted EPS,
efficiencies, cost savings, tax benefits, revenue, growth potential
of CoStar Group, CoreLogic or a potentially combined company,
expanded customer segments and total addressable market, reduced
revenue volatility, cross-selling opportunities, market profile and
financial strength, including near term and long-term value for
shareholders, and opportunities for long-term growth, value
creation and product innovation, including an integrated and
improved offering; the competitive ability and position of CoStar
Group, CoreLogic or a potentially combined company; the ability to
effectively and efficiently integrate the companies and their
technology and content acquisition to create a comprehensive
solution; future plans and investments; and any assumptions
underlying any of the foregoing, are forward-looking statements.
Factors that may affect the future results of CoStar Group are set
forth in CoStar Group’s filings with the SEC, including CoStar
Group’s most recently filed Annual Report on Form 10-K which is
available on the SEC’s website at www.sec.gov. The risks and
uncertainties described above and in CoStar Group’s most recent
Annual Report on Form 10-K are not exclusive and further
information concerning CoStar Group and its business, including
factors that potentially could materially affect CoStar Group’s
business, financial condition or operating results, may emerge from
time to time. Readers are urged to consider these factors carefully
in evaluating these forward-looking statements, and not to place
undue reliance on any forward-looking statements. Readers should
also carefully review the risk factors described in other documents
that CoStar Group files from time to time with the SEC. The
forward-looking statements in these materials speak only as of the
date of these materials. Except as required by law, CoStar Group
assumes no obligation to update or revise these forward-looking
statements for any reason, even if new information becomes
available in the future.
No Offer or Solicitation
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
Additional Information and Where to Find It
This communication relates to a proposal which CoStar Group has
made for an acquisition of CoreLogic. In furtherance of this
proposal and subject to future developments, CoStar Group (and, if
a negotiated transaction is agreed, CoreLogic) may file one or more
registration statements, proxy statements, tender offer statements
or other documents with the SEC. This communication is not a
substitute for any proxy statement, registration statement, tender
offer statement, prospectus or other document CoStar Group and/or
CoreLogic may file with the SEC in connection with the proposed
transactions.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ ANY PROXY
STATEMENT(S), REGISTRATION STATEMENT(S), TENDER OFFER STATEMENT,
PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC
CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT COSTAR GROUP,
CORELOGIC AND THE PROPOSED TRANSACTIONS. Any definitive proxy
statement(s) or prospectus(es) (if and when available) will be
mailed to stockholders of CoStar Group and/or CoreLogic, as
applicable. Investors and security holders will be able to obtain
copies of these documents (if and when available) and other
documents filed with the SEC by CoStar Group free of charge through
the website maintained by the SEC at www.sec.gov. Copies of the
documents filed by CoStar Group (if and when available) will also
be made available free of charge by accessing CoStar Group’s
website at www.costargroup.com.
Certain Information Regarding Participants
This communication is neither a solicitation of a proxy nor a
substitute for any proxy statement or other filings that may be
made with the SEC. Nonetheless, CoStar Group and its directors and
certain of its executive officers and other members of management
and employees may be deemed, under SEC rules, to be participants in
the solicitation of proxies in respect of the proposed transaction.
Security holders may obtain information regarding the names,
affiliations and interests of such individuals in CoStar Group’s
Annual Report on Form 10-K for the year ended December 31, 2020,
which was filed with the SEC on February 24, 2021, and its
definitive proxy statement for the 2020 annual meeting of
stockholders, which was filed with the SEC on April 24, 2020 and
certain of its Current Reports on Form 8-K. Additional information
regarding the interests of such individuals in the proposed
transaction will be included in one or more registration
statements, proxy statements, tender offer statements or other
documents filed with the SEC if and when they become available.
These documents (if and when available) may be obtained free of
charge from the SEC’s website http://www.sec.gov and CoStar Group’s
website at www.costargroup.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210301005485/en/
CoStar Group Investor Scott Wheeler Chief Financial
Officer (202) 336-6920 swheeler@costar.com Bill Warmington
Investor Relations (202) 346-5661 wwarmington@costar.com
Media Matthew Blocher Marketing & Communications (202)
346-6775 mblocher@costar.com
CoStar (NASDAQ:CSGP)
Historical Stock Chart
From Mar 2024 to Apr 2024
CoStar (NASDAQ:CSGP)
Historical Stock Chart
From Apr 2023 to Apr 2024