Benzinga | Mar 1, 2021 07:42AM EST

CoStar Group Submits Revised Proposal to Acquire CoreLogic; Revised Proposal Adds $450M ($6/Share) in Cash to Previous All-Stock Offer

Today, CoStar Group, Inc. (NASDAQ:CSGP) delivered a letter to the Board of Directors of CoreLogic (NYSE:CLGX) setting forth the terms of a revised proposal by CoStar Group to acquire 100% of the equity interests of CoreLogic. Under the terms of the new proposal, CoreLogic shareholders would receive $6.00 per share in cash and 0.1019 shares of CoStar Group common stock in exchange for each share of CoreLogic common stock, representing a value of approximately $90 per share based on CoStar Group's closing share price on February 26, 2021 and approximately $97 per share based on the latest 30-day volume-weighted average CoStar share price. The new offer represents a $17 per share improvement over the Stone Point and Insight offer, which is equivalent to over $1.25 billion more in aggregate value. The Stone Point and Insight offer now represents a 6% discount to CoreLogic's latest closing price of $84.66, while the CoStar Group offer represents a 15% premium and implies pro forma diluted ownership of approximately 16.2% in the combined entity and $450 million in cash for current CoreLogic stockholders.

The following is a copy of the letter that CoStar Group delivered to the Board of Directors of CoreLogic on March 1, 2021:

Dear CoreLogic Board Members:

We write to provide you with updated terms of a negotiated transaction, which we are confident constitute a "Superior Proposal" under your existing agreement with Stone Point Capital and Insight Partners (the "SPC Agreement"). Since your announcement of the SPC Agreement and our previous letter to you on February 16, 2021, your stock price has remained well above the SPC Agreement's $80 per share price. Clearly, your stockholders are holding firm to their support for a transaction between our two companies over the SPC Agreement.

CoStar Group is committed to moving forward with such a transaction. Set forth below are our revised key terms since our February 16th letter, addressing all of your issues. We will separately send you and your legal advisors a version of the merger agreement memorializing the terms below. We are prepared to sign that version immediately.

We expect the CoreLogic Board to deem this proposal to be a "Superior Proposal" within 48 hours.

Consideration: We propose a merger transaction whereby CoStar would acquire 100% of the equity interests of CoreLogic in a stock and cash transaction. CoreLogic shareholders will receive 0.1019 shares of newly issued CoStar common stock and $6.00 in cash for each share of CoreLogic's issued and outstanding common stock. This implies a headline value of $90 per share based on CoStar's latest closing share price and $97 per share based on the latest 30-day volume-weighted average CoStar share price. Further, this offer represents over $1.25 billion more in aggregate value or a $17 per share improvement over the SPC Agreement. The SPC Agreement now represents a 6% discount to CoreLogic's latest closing price of $84.66, while our offer represents a 15% premium (and a 21% premium to the SPC offer of $80/share) and implies pro forma diluted ownership of approximately 16.2% in the combined entity and $450 million in cash for current CoreLogic stockholders.