According to the AFR, investment bankers representing both companies are currently in discussions, with Nine’s representatives suggesting they would accept $4.65 per share for the media company’s 60 per cent stake in Domain.
However, Domain has confirmed it has not received a revised proposal from Nasdaq-listed CoStar.
If the deal was accepted, it would value Nine’s shareholding at approximately $1.76 billion.
The negotiations follow CoStar’s recent sharemarket raid on Domain, where it acquired a 16.9 per cent stake before making a cash offer of $4.20 per share for the remainder of Australia’s second-largest property listings platform.
The proposed $4.65 per share represents a 49 per cent premium over Domain’s trading price before CoStar’s initial offer, which was pitched at a 34.6 per cent premium.
Market conditions have shifted since CoStar’s initial bid, with the S&P/ASX 200 falling 5 per cent amid widespread volatility triggered by US President Donald Trump’s trade war.
However, the Australian dollar’s current value at US63¢, about 10 per cent below its 10-year trading average, works in CoStar’s favour.
According to the AFR, negotiations indicate that Domain chairman Nick Falloon has not engaged with CoStar’s founder and chief executive, Andy Florance, since an initial phone call, suggesting Nine’s bankers are leading the discussions.
Some of Nine’s major shareholders have expressed support for a potential sale.
Fund manager Pendal, which owns 7.6 per cent of Nine, has encouraged Nine’s chief executive Matt Stanton to consider a deal, while Investors Mutual Limited has indicated that the initial $4.20 offer is insufficient the AFR said.
A sale would significantly reshape Nine Entertainment, which currently owns the Nine Network, streaming service Stan, radio stations including 2GB and 3AW, and publishing assets including The Sydney Morning Herald, The Age and the Australian Financial Review.
Nine is currently valued by the market at approximately $2.5 billion.
If the sale proceeds, Nine could potentially pay down some of its $628.5 million in debt and return a portion to investors.