CoStar Group Inc. (NASDAQ: CSGP) announced that it has withdrawn its bid to acquire Irvine-based CoreLogic Inc. (NYSE: CLGX), the real estate data provider that recently agreed to sell itself for $6 billion to a rival bidder.
CoStar shareholders weren’t happy with the proposed acquisition, having driven down the price almost 20% prior to today’s announcement. After CoStar withdrew its bid, its shares rose 3.2% to $782.78 and a $30.8 billion market cap. On Feb. 12, the trading session before announcing its bid, CoStar shares closed at $939.76.
“With interest rates moving up, now is not the time for us to aggressively buy into the residential mortgage market,” Andrew C. Florance, founder and chief executive officer of CoStar, said in a statement.
CoStar in February made an all-share offer that valued CoreLogic at $95.76 at that time. Since then, CoStar shares have fallen to a point where the offer valued CoreLogic at about $84.60 a share.
Yesterday, CoreLogic said the offer wasn’t enough and suggested CoStar could pay all in cash.
The deal would have combined market leaders in providers of data for both residential and commercial markets.
“CoStar Group continues to believe that a strategic combination of CoStar and CoreLogic had the potential to create significant value for all shareholders, and that CoreLogic is an excellent company with a talented team,” CoStar’s statement said.
CoreLogic, which last year fought off a proxy battle where activist investors offered $66 a share, on Feb. 4 announced it had accepted an $80 a share offer from Stone Point Capital and Insight Partners. CoreLogic yesterday said the $80 offer is progressing and a close is expected in the second quarter.
After CoStar's announcement, shares of CoreLogic dropped 3.7% to $78.73 and a $5.8 billion market cap.
Florance congratulated Stone Point and Insight for its winning bid and CoreLogic’s management for “achieving a strong valuation for their shareholders.”