CoStar Boosts Its Offer to Acquire CoreLogic to $6.9 Billion

CoStar Group Inc. boosted its offer to acquire CoreLogic Inc. to $95.76 a share, topping a bid the property-data company accepted earlier this month.

CoreLogic’s recent agreement with funds managed by Stone Point Capital and Insight Partners “was materially less than our last all-stock offer,” CoStar Chief Executive Officer Andrew Florance said in a letter Tuesday to CoreLogic’s board. He added he was “stunned” to read about the deal.

CoStar’s newest offer represents an equity value of approximately $6.9 billion, a 20% more than the earlier offer, CoStar said in a statement. CoreLogic said in its own statement that while the takeover agreement with Stone Point Capital and Insight Partners “remains in full force and effect,” it will review CoStar’s new offer.

“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 the letter. “The fact that CoreLogic stock continues to trade well above the pending transaction price is a clear indication that the shareholders agree with us.”

CoreLogic has become an appealing target as the U.S. housing market booms, fueled by historically low mortgage rates. The buying and refinance frenzy has ignited interest in real estate technology.

CoreLogic shares surged as much as 6.5% in New York trading Tuesday. They’ve gained 12% this year.

Funds managed by Stone Point Capital and Insight Partners agreed to buy CoreLogic earlier this month in a deal with an equity value of about $6 billion. That came after CoStar made an offer worth $86 a share, according to Bloomberg calculations.

Under the terms of the newest proposal, CoreLogic shareholders would receive 0.1019 shares of CoStar in exchange for each share of CoreLogic stock, representing a value of $95.76 a share based on CoStar’s closing price Friday.

Irvine, California-based CoreLogic launched a strategic review in November amid a boardroom battle with investors Cannae Holdings Inc. and Senator Investment Group. The duo subsequently won three seats on CoreLogic’s board.

The investors had offered to buy the company in June but pulled out of the sales process after CoreLogic said it had received indications of interest at $80 or above. The duo, which said they weren’t interested in acquiring CoreLogic at that price, had offered $66 a share to buy the company.

CoreLogic’s board “has not withdrawn or modified its recommendation that the stockholders of CoreLogic vote in favor” of the agreement with Stone Point Capital and Insight Partners, CoreLogic said in its statement, adding that directors will review CoStar’s newest offer with outside legal and financial advisers to determine if it’s a superior proposal.

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