CoStar’s fight for CoreLogic has ended in defeat.
The bruised data giant, which spent the last few weeks trying to outbid Stone Point Capital and Insight Partners in a bid for CoreLogic, withdrew its $7.35 billion offer on Thursday and said it was terminating acquisition discussions.
CoStar cited rising interest rates and a negative outlook for the mortgage refinancings, which caused valuations for residential proptech companies to drop in recent weeks.
“With interest rates moving up, now is not the time for us to aggressively buy into the residential mortgage market,” CoStar CEO Andy Florance said in a statement.
But CoStar’s withdrawal came hours after news broke that CoreLogic’s board of directors indicated its offer wasn’t good enough.
In a letter to CoStar, CoreLogic CEO Frank Martell said a material increase in the cash portion of the offer would improve the bid, Bloomberg News reported.
In February, CoreLogic’s board agreed to sell the company to Stone Point Capital and Insight Partners for $6 billion. The deal was the culmination of several months of jockeying for control of the company, after activist investors urged its board to explore strategic options, including a sale.
But weeks after that deal was announced, CoStar swooped in with a $6.9 billion offer that it claimed was “superior.”
On March 1, CoStar upped its offer by $450 million, besting Stone Point and Insight by $1.25 billion. “CoStar Group is committed to moving forward with such a transaction,” CEO Andy Florance wrote in a letter to CoreLogic’s board. He gave the board 48 hours to weigh in on the “superior proposal.”
In other CoStar news, a Delaware bankruptcy court ruled Thursday that the company will have to pay a $52 million break-up fee after failing to acquire RentPath last year.
The two companies struck a $585 million deal in February 2020, when CoStar agreed to buy RentPath out of bankruptcy. In November 2020, federal regulators sued to block the deal on antitrust grounds.
After RentPath pulled out, CoStar fought the nearly-$60 million break-up fee. Ultimately, the court said CoStar had to pay 88.5 percent of the fee.
In a statement following the court’s decision, RentPath CEO Dhiren Foonseca said, “$52 million is a lot of money, and CoStar shareholders and customers should be asking themselves, who ultimately will be stuck with that bill?”
RentPath, meanwhile, has moved on. Last month, Redfin said it would buy RentPath for $608 million. The deal is subject to FTC and bankruptcy court approval.