BACKGROUND
On 9 May 2025, Domain announced it had entered into a Scheme Implementation Deed with CoStar Group, Inc. (CoStar) and its indirect wholly owned subsidiary, Andromeda Australia SubCo Pty Limited (Bidder Sub), under which it is proposed that Bidder Sub will acquire 100% of the Domain Shares (other than those held by Excluded Shareholders) via a scheme of arrangement at a price of $4.43 per Domain Share.
The Excluded Shareholders are any Domain Shareholder who is a member of the CoStar Group or who holds any Domain Shares on behalf of, or for the benefit of, any member of the CoStar Group as at the Scheme Record Date. As at the Last Practicable Date of the Scheme Booklet, being 23 June 2025, Bidder Sub is the only Excluded Shareholder, holding legal and beneficial title in approximately 16.96% of the Domain Shares on issue.
This followed a previous non-binding indicative proposal received from CoStar on 21 February 2025 offering $4.20 per Domain Share (Original Proposal). Ahead of the Original Proposal, on 20 and 21 February 2025, CoStar acquired 16.96% of Domain’s ordinary shares. Following receipt of the Original Proposal, the Domain Board engaged constructively with CoStar, agreeing to a revised offer of $4.43 per Domain Share, representing a 5.5% uplift compared to the Original Proposal. Domain entered into an exclusivity and process deed (Exclusivity Deed) with CoStar on 31 March 2025 to facilitate CoStar conducting due diligence in connection with the Scheme and, following completion of this due diligence, Domain announced it had entered into the Scheme Implementation Deed with CoStar and Bidder Sub (as noted above).
Prior to entering into the Scheme Implementation Deed, the Domain Board considered a number of alternative options to maximise value and undertook an assessment of standalone value. The various alternatives were evaluated across a number of scenarios and criteria. The Scheme was selected on the basis of it delivering the highest and most certain value to Domain Shareholders.
SCHEME CONSIDERATION
If the Scheme is approved and implemented, Domain Shareholders (other than Excluded Shareholders) will receive $4.43 cash per Domain Share (Scheme Consideration).
The Domain Board currently intends to determine a fully franked special dividend of up to 8.8 cents per Domain Share (including in respect of Domain Shares held by Excluded Shareholders) which, subject to the Scheme becoming Effective, is expected to be paid to all Domain Shareholders (including Excluded Shareholders) prior to the implementation of the Scheme (Special Dividend). If a Special Dividend is determined and paid, the Scheme Consideration will be reduced by the cash amount of that Special Dividend and certain Domain Shareholders may be able to realise the benefit of up to 3.77 cents of franking credits per Domain Share that will be attached to the Special Dividend. The payment and the amount of a Special Dividend is subject to determination by the Domain Board.
Whether a Domain Shareholder will realise the benefit of any franking credits attached to any Special Dividend will depend on the terms of the Class Ruling and the Domain Shareholder’s own specific circumstances. For further information, refer to section 8 of the Scheme Booklet.
The Scheme Consideration of $4.43 per Domain Share values Domain at an implied enterprise value of approximately $3.0 billion and represents a premium of:
- 42.0% to Domain’s undisturbed share price on 20 February 2025 (Last Undisturbed Trading Date);
- 50.2% to the 1-month volume weighted average price (VWAP) of Domain Shares to the Last Undisturbed Trading Date; and
- 59.7% to the 3-month VWAP of Domain Shares to the Last Undisturbed Trading Date.
BOARD RECOMMENDATION & NINE VOTING INTENTION
The Domain Board unanimously recommends that Domain Shareholders (other than Excluded Shareholders) vote in favour of the Scheme in the absence of a Superior Proposal and subject to the Independent Expert continuing to conclude that the Scheme is in the best interests of Domain Shareholders (other than Excluded Shareholders). Subject to the same qualifications, the Domain Directors each intend to vote all the Domain Shares held or controlled by, or on behalf of, them in favour of the Scheme.
Nine Entertainment Co. Holdings Limited (Nine) has confirmed that it intends to vote all of the Domain Shares it holds or controls in favour of the Scheme in the absence of a superior proposal (as determined by Nine) and subject to the Independent Expert continuing to conclude that the Scheme is in the best interests of Domain Shareholders (other than Excluded Shareholders). Nine is the controlling shareholder of Domain and has a Relevant Interest in approximately 60.05% of Domain Shares on issue as at the Last Practicable Date of 23 June 2025.
In reaching its recommendation, the Domain Board carefully considered the expected advantages and potential disadvantages of the Scheme together with Domain’s financial and legal advisers. The Domain Board unanimously believes the reasons for you to vote in favour of the Scheme outweigh the reasons for you to vote against the Scheme. The Domain Board considers the Scheme to be in the best interests of Domain Shareholders, having regard to the significant premium to pre-announcement trading, the certainty of value delivered by the Scheme Consideration and the support of Domain’s major shareholder, Nine.
Key reasons to vote in favour of the Scheme, and reasons why you may choose to vote against the Scheme, are set out in section 1 of the Scheme Booklet.
When considering the recommendation of the Domain Directors, Domain Shareholders should have regard to the interests of the Domain Directors, which are set out in detail in section 9 of the Scheme Booklet.
INDEPENDENT EXPERT
Domain has appointed Grant Samuel as the Independent Expert to assess the merits of the Scheme. The Independent Expert has concluded that the Scheme is fair and reasonable and therefore in the best interests of Domain Shareholders (other than Excluded Shareholders) in the absence of a Superior Proposal.
The Independent Expert has assessed the full underlying value of each Domain Share at between $4.06 to $4.46 per Domain Share on a fully diluted basis. The Scheme Consideration amount of $4.43 per Domain Share is close to the top end of the Independent Expert’s value range.
A copy of the Independent Expert's Report is included in Attachment A of the Scheme Booklet.