CoStar Group ups all-stock offer for CoreLogic to $6.9B

Real estate data provider CoStar Group Inc. has increased its offer to buy CoreLogic Inc. to $95.76 per share, or $6.9 billion overall, weeks after CoreLogic agreed to sell to private equity firms Stone Point Capital LLC and Insight Partners for $80 per share in cash, or $6.0 billion in total.

Prior to the deal agreement with the private equity firms, CoStar had offered to buy CoreLogic for $86 per share, valuing the company at about $6.7 billion.

CoStar's new offer is 20% higher than CoreLogic's pending deal with the two equity firms.

In a letter to CoreLogic's board, CoStar proposed to buy 100% of the equity interest in CoreLogic. Under the proposal, CoreLogic shareholders would receive 0.1019 of a share of CoStar common stock in exchange for each share of CoreLogic common stock, or about $95.76 per share based on CoStar's closing share price of $81.99 on Feb. 12.

CoStar said its proposal represents 16.2% pro forma diluted ownership for CoreLogic shareholders in the combined entity and a $15.76 per share or an about $1 billion improvement to the value of CoreLogic’s pending transaction as of Feb. 12.

According to CoStar, its proposed combination is expected to deliver $150 million to $250 million in annual run-rate adjusted EBITDA synergies within three to four years. The deal is expected to be highly accretive to adjusted EPS by about 30% within the first year before the synergies, according to the company release.

In a press release issued the same day, CoreLogic confirmed it received CoStar's increased offer but said the merger agreement with Stone Point Capital and Insight Partners remains in effect.

"CoreLogic's board of directors, consistent with its fiduciary duties and the terms of the merger agreement, will carefully review the proposal in consultation with its outside legal counsel and financial advisers to determine whether it is or would reasonably be expected to result in a superior proposal," the company said.

CoreLogic's financial adviser is Evercore, and its legal adviser is Skadden Arps Slate Meagher & Flom.