CoStar Swoops in With a $6.9B Bid for CoreLogic
This tops Stone Point Capital and Insight Partners’ earlier bid of $6 billion.
CoStar Group is making an offer for CoreLogic of $96.76 per share of CoStar’s stock, or roughly $6.9 billion. This follows Stone Point Capital and Insight Partners’ bid earlier this month of $6 billion for the global property information, data and analytics firm.
CoStar says its proposal represents 16.2% pro forma diluted ownership for CoreLogic shareholders in the combined entity, and a $15.76 per share improvement to the value of CoreLogic’s pending transaction as of February 12, 2021.
This is not the first time CoStar has tried to acquire the firm, with its last all-stock offer clocking in at $86.30 per share. CEO Andrew C. Florance noted that when he read that Stone Point Capital and Insight Partners made a cash bid of $80 per share for the company, which was accepted, he was “stunned.”
“We do not believe the pending transaction maximizes value for CoreLogic stockholders and we continue to believe in the strong strategic rationale for the combination of our two companies,” Florance said in a letter to CoreLogic’s board of directors.
Companies have been vying for CoreLogic since last summer at the behest of activist investors from Cannae Holdings and Senator Investment Group. Private equity firm Warburg Pincus has also been an interested bidder, as have Cannae and Senator, which offered $7 billion for the company, including debt. Bloomberg previously reported that CoreLogic’s board rejected the proposal, as well as a second offer at $66 a share, saying that it undervalued the company.
Perhaps none have been as aggressive as CoStar, though, which has made multiple acquisition proposals to CoreLogic since October. To cinch the deal this time, Florence said in his letter that the CoStar made a point of addressing the reasons that might have prompted CoreLogic to go with the other offer: time to close, antitrust and interim business operations.
He also pointed out that Stone Point had to secure $5.5 billion of debt to finance its acquisition of CoreLogic. “If true, that implies leverage of over ten times, based on historical EBITDA—a crushing debt load, with potentially devastating consequences for CoreLogic, its employees, and clients.”