CoStar drops out of CoreLogic bidding war, citing rising mortgage rates

CoStar Group has elected to end its hostile bid to acquire CoreLogic, citing the impact of rising interest rates on the value of real estate-related businesses.

"With interest rates moving up, now is not the time for us to aggressively buy into the residential mortgage market," Andrew Florance, CEO of CoStar Group said in a press release that came out after the market closed on Thursday.

Earlier in the day, CoreLogic asked CoStar to increase the cash portion of its $7.25 billion offer for the company.

CoStar closed on Thursday at $758.46, down $4.34 per share from the previous day. But in early post-closing trading, CoStar's shares zoomed up to $820.

CoreLogic's primary concern regarding CoStar's bid was that its stock price had fallen $177 per share between Feb. 12 — the last trading day before CoStar publicized an enhanced all-stock offer — and March 3.

CoStar's release said while it still felt the combination would create significant value for shareholders of both companies, it is committed to maintaining a disciplined approach to evaluating potential strategic acquisitions.

"We wish to congratulate Stone Point and Insight Partners on their successful bid to acquire CoreLogic," Florance said. "We thank the CoreLogic board and management team for including us in the process and congratulate them on achieving a strong valuation for their shareholders."

CoreLogic, which ended the trading day at $81.79, down $1.07 from its previous close, slipped further in afterhours trading.

It was trading at $78.65 at 4:40 p.m.

This was the first time CoreLogic traded below the $80 per share acquisition price it agreed to with Stone Point/Insight, since the deal was announced on Feb. 4.