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It’s well known to daily finance and business news readers that Nine Entertainment’s (ASX:NEC) ownership of Domain (ASX:DHG) sees it talking about property a lot on its various mastheads and platforms.
That makes sense. Domain makes money off advertising property ads, and the best way to make people want property is to tell them how they can get it.
Or even better, to make them worry about not having it.
Just think of every article you’ve ever seen on a Nine masthead – maybe this will only be relevant for millennial readers – saying something like, “This couple just bought a property at 24 – here’s how they did it.”
Or articles from Murdoch-backed competitor REA Group (ASX:REA) which typically look like “Tips from a young couple who bought in Melbourne before age 25.”
These articles are all ads.
They’re ads quite good at making people worry about what they don’t have – wait, you mean you don’t own property at 25? – and I can personally report, reader, they are the source of stress for many without an ideological fortress.
Anyway, we could be seeing that kind of thing change. Or, we could be about to see a lot more of it.
Nine’s Domain has today soared 40% to $4.34/sh, which matches – goes beyond, actually – the offer price for Domain Nine has received from a company called CoStar, ultimately worth $2.7B (that deal puts Domain shares at $4.20; a 40%+ premium.)
Domain competes with REA Group – a far superior company with a $31.6B market cap – but today, Domain’s bid has seen REA shares tank -10% to just shy of $240/sh as investors wonder whether Domain could be a better bet.
Nine, just because it owns Domain, jumped 23% to $1.77/sh.
CoStar is understood to be a company good at doing one thing: picking up struggling companies, lowering customer prices, and injecting a lot of money into marketing and advertising.
(This is also what Temu does, and how it’s managed to become the predominant e-dollar store of the current moment.)
For now, Nine says it will consider the deal, but given the fact both Domain and its owner Nine have shot up today, it’s a pretty clear sign many would like the deal to go ahead.
NEC last traded at $1.77/sh.
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