In a letter to CoreLogic shareholders, CoStar Group CEO Andy Florance outlines a ‘superior’ proposal to trump private equity bidders.
Just two weeks ago it appeared CoStar Group was out of the running to buy real estate data and analytics giant CoreLogic, the latter of which appeared to be sold to two private equity firms for a sum of $6 billion.
CoStar Group CEO Andy Florance revived his company’s efforts to acquire the firm Tuesday in a letter to CoreLogic shareholders in which he outlined CoStar Group’s new nearly $7 billion offer to buy CoreLogic, a total which amounts to a price of $95.76 per share.
“Given our substantial engagement since early December, we were stunned to read about the acquisition of CoreLogic by Stone Point Capital and Insight Partners on February 4, 2021,” Florance wrote. “Their cash bid of $80 per share was materially less than our last all-stock offer, which had a headline value of $86.30 per share.”
“The decision to accept the lower $80 per share bid from a sponsor instead indicates a failure to appropriately value the synergies of our proposal as a strategic bidder.”
CoreLogic’s stock closed the day Monday trading at $81.99, above the price that Stone Point Capital and Insight Partners agreed to pay to acquire CoreLogic.
The transaction is still pending shareholder approval and the firms originally estimated it would close in the second quarter of 2021.
“The fact that CoreLogic stock continues to trade well above the pending transaction price is a clear indication that the shareholders agree with us,” Florance wrote. “Accordingly, we propose moving forward with an acquisition of CoreLogic that will provide value directly to CoreLogic’s stockholders that is substantially superior to the value they would receive in the pending transaction.”
Florance said he believes CoStar’s competing proposal offers “superior value” to CoreLogic’s stockholders and that there’s a “strong strategic rationale” for the combination of the two firms.
CoreLogic offers a variety of multiple listing services and real estate data products, including the popular digital MLS platform Matrix.
CoStar in recent months has moved deeper into the residential real estate space in recent months, first with the acquisition of Homesnap and recently with the acquisition of houses.com. Florance, in an appearance at Inman Connect last month, outlined the company’s plans to build a residential search site.
CoStar already has a massive footprint in both the commercial real estate and rental space, with auction.com and apartments.com among the company’s biggest properties.