BETHESDA, Md., Aug. 12 -- CoStar Group, Inc. (Nasdaq: CSGP ) today announced that it has made a proposal to REIS, Inc. (Nasdaq: REIS ), a provider of commercial real estate market information based in New York, NY, to acquire all the fully diluted shares of REIS common stock for a per share consideration of $8.75, all cash with no financing contingency. The all cash proposal represents a premium of approximately 97% above the closing price of REIS common stock on August 12, 2008.
CoStar initially made the offer to acquire REIS at $8.75 per share on June 5, 2008. On June 30, 2008, CoStar received a letter from Lloyd Lynford, the Chief Executive Officer and President of REIS, indicating that the Board of Directors of Reis had considered CoStar's proposal and that "the Board has determined that there is no reason to explore further" CoStar's proposal. Since CoStar made that offer, REIS' share price has dropped by approximately 20%. Regardless, at this time CoStar reiterates its offer to acquire REIS in a friendly merger of the two companies, which CoStar believes would be in the best interests of the stockholders of both companies.
CoStar believes that the combination of CoStar and REIS would create substantial operational efficiencies by eliminating redundant infrastructure and duplicative operating costs. CoStar expects that an acquisition of REIS at $8.75 per share would be accretive to its previously stated EBITDA and earnings goals. CoStar also believes that REIS' customers would benefit from the depth and quality of CoStar's research. Indeed, CoStar's consistent belief has been that the combination of CoStar and REIS clearly represents the best way to deliver maximum value to our respective shareholders, as well as create a more efficient and competitive company that would provide greater value and service to our customers.
Despite REIS' rejection of our initial offer, CoStar remains committed to working closely with REIS' senior management and Board of Directors on a friendly basis to quickly enter into a definitive agreement and begin operating as a combined entity that provides enhanced value and services.
The following is the text of the letter that CoStar sent today to REIS' CEO and President, Lloyd Lynford:
As you will recall, CoStar Group, Inc. ("CoStar") wrote to you on June 5, 2008, outlining our offer to acquire all the fully diluted shares of REIS Inc. ("REIS") common stock at a per share consideration of $8.75, all cash with no financing contingency.
On June 30, 2008, CoStar received a letter from you indicating that the Board of Directors of REIS had considered CoStar's proposal and that "the Board has determined that there is no reason to explore further" CoStar's proposal.
Since we made that offer and you rejected it, your share price has dropped by approximately 20%. Despite your rejection and the continued drop in REIS' share price, we continue to believe that a combination between CoStar and REIS would offer significant and certain value to REIS' shareholders and greatly enhance both companies' abilities to serve our respective customers. We believe a combination with CoStar would eliminate very substantial duplicative costs and provide the opportunity to immediately refocus REIS' business entirely on the real estate information services segment.
Accordingly, CoStar once again reiterates its offer to acquire all of the fully diluted, outstanding shares of REIS for $8.75 per share, all cash with no financing contingency. This all cash proposal represents a premium of approximately 97% above today's common stock closing price of $4.44. Our proposal is subject to the approval of REIS' and CoStar's boards of directors and the negotiation of a definitive merger agreement.
We continue to look forward to discussing a possible friendly business combination with REIS.
Chief Executive Officer and President
About CoStar Group, Inc.
CoStar Group, Inc. (Nasdaq: CSGP ) is the number one provider of information/marketing services to commercial real estate professionals in the United States as well as the United Kingdom. CoStar's suite of services offers customers access via the Internet to the most comprehensive database of commercial real estate information throughout the U.S. as well as in the United Kingdom and France. Headquartered in Bethesda, MD, CoStar has approximately 1,300 people working for the company worldwide, including the largest professional research organization in the industry. For more information, visit http://www.costar.com.