REIS Considers CoStar’s Latest Merger Offer “Hostile”

Having declined the first merger proposal from competitor CoStar Group Inc., in June, commercial real estate market information provider REIS has rejected the second proposal, an identical one, much more quickly — and in much stronger terms. On June 30, REIS, based in Bethesda, Md., had declined CoStar’s June 5 offer of $8.75 a share with the simple comment that “the Board of Directors has determined that there is no reason to explore further” that proposal. In the latest go-around, CoStar repeated its offer on Tuesday, its proposal over the signature of CEO and president Andrew Florance noting that REIS’ stock price had fallen about 20 percent in the interim. Yesterday, REIS CEO Lloyd Lynford fired back: “It is extraordinarily disappointing that, after our Board unequivocally rejected CoStar’s $8.75 proposal, CoStar has seen fit to come back with exactly the same proposal in a hostile fashion. To judge the value of our company by the daily trading prices of its relatively illiquid common stock makes no sense.” For its part, CoStar, New York, had noted that its offer, to acquire all the fully diluted shares of REIS common stock for all cash with no financing contingency, represented a premium of about 97 percent above the stock’s closing price on Tuesday, the 12th. Lynford’s latest letter to CoStar also stated: “We trust that our clear second rejection of CoStar’s offer will prompt CoStar to withdraw it.” Founded in 1980 as Reis Inc., REIS provides commercial real estate market information to investors, appraisers, owners and others through its proprietary database of information on commercial properties throughout the U.S. Using its own database, CoStar Group Inc. provides similar information services to clients in both the U.S. and the United Kingdom. The company employs about 1,300 people worldwide.