Costar, News Corp. Fail to Reach Deal for Move
Costar CEO says firm will not buy Realtor parent, deal on table was for $3B
CoStar has ended talks with News Corp. to purchase Move Inc., the parent of Realtor.com and several other CRE-related websites, in a deal that would have been valued at an estimated $3B.
Costar CEO Andy Florance disclosed in an earnings call this week that CoStar will not be acquiring Move.
In an SEC filing last month, News Corp. confirmed it had entered into discussions with CoStar about Move as part of an ongoing effort “to assess opportunities that will maximize shareholder value.”
The media conglomerate began shopping Move after News Corp. founder Rupert Murdoch recommended that the two crown jewels of his family’s media empire—News Corp. and Fox Corp.—be reunited into a single corporate entity, a plan Murdoch has since abandoned after investor pushback.
According to a report Wednesday in the Wall Street Journal (which is owned by News Corp.), the $3B deal that was on the table with CoStar would have given the media conglomerate an infusion of liquidity at a time when tech and media companies are facing challenges from higher interest rates and reduced revenues.
News Corp’s digital real estate services division reported a 15% decrease in revenue to $386M in the fourth quarter, with segment earnings declining 28%, WSJ said.
The negotiations with News Corp. represent another unsuccessful effort by CoStar to expand its platform into the residential sales market and potentially eclipse Zillow as the leader in the online home market.
CoStar, a major provider of real estate marketplaces, information and analysis for commercial and residential property markets, has made several efforts to expand its digital footprint, including proposed acquisitions that have drawn scrutiny from federal regulators.
CoStar has attempted to buttress its residential sector business with several acquisitions since 2020. The company closed deals to acquire Homesnap and Home.com, but two other high-profile acquisition proposals fell apart due to concerns that the deals would trigger antitrust litigation.
CoStar’s attempt in 2020 to acquire RentPath—then the owner of Rent.com and ApartmentGuide.com—was quashed when the Federal Trade Commission authorized a legal action against the deal. RentPath eventually was acquired by Redfin for $608M.
In February 2021, CoreLogic rejected a $700M acquisition offer from CoStar. In an open letter to Florance, CoreLogic cited the potential for antitrust litigation as a reason for rejecting the offer. CoreLogic then was acquired by private equity firms Stone Point Capital and Insight Partners.
News Corp. acquired Move in 2014 for $950M. REA Group, an Australia-based online real estate business that News Corp. also controls, owns 20% of Move.