After the FTC spiked CoStar’s attempted acquisition of RentPath, Redfin stepped in to buy the embattled operator of rental marketplaces.
CoStar Group and RentPath reached a settlement today that would pay RentPath $52 million — or 88 percent of the proposed break-fee — as a result of CoStar’s failed acquisition attempt of RentPath. The deal comes months after the FTC spiked CoStar’s attempt to acquire RentPath for $587.5 million.
RentPath, which filed for Chapter 11 bankruptcy in late February 2020 prior to the attempted acquisition, had petitioned a bankruptcy court in Delaware to expedite payment of the break-up fee, which was being held in escrow.
“$52 million is a lot of money, and CoStar shareholders and customers should be asking themselves, who ultimately will be stuck with that bill,” Dhiren Fonseca, RentPath’s CEO, said in a statement.
CoStar is currently also in an aggressive pursuit of acquiring real estate data and analytics firm CoreLogic. The company upped its bid earlier this week, despite CoreLogic already seemingly having another deal in place.
The settlement also follows Redfin’s acquisition of RentPath for $608 million, which was roughly $20 million more than the original deal with CoStar.
Redfin’s acquisition is partially a move aimed at bolstering traffic to Redfin’s online real estate portal, which has the biggest audience for any brokerage website and signaled a move into the residential real estate marketplace.
RentPath — which owns the consumer-facing rental portals Rent.com and ApartmentGuide.com — brings to Redfin a younger audience of consumers that aren’t yet searching for a home.
“It’s a total grand slam for RentPath and our employees; in the space of a few days, we have reached an agreement to be acquired by Redfin for a higher price,” Fonseca said. “In Redfin, we now have a partner who we know we can trust, who shares our values and moral ethic, and whose commitment to delivering value to customers is aligned with our DNA.”
A spokesperson for CoStar did not immediately respond to a request for comment. The story may be updated with any additional comments, as received.