CoStar Reiterates Offer to Acquire REIS, Inc. for $8.75 Per Share in Cash, a
97% Premium to Last Closing Price
BETHESDA, Md., Aug. 12 /PRNewswire-FirstCall/ -- 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:
Dear Lloyd:
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.
Yours truly,
Andrew Florance
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 www.costar.com .
This news release includes "forward-looking statements" including, without
limitation, statements regarding CoStar's expectations, beliefs, intentions or
strategies regarding the future. These statements are subject to many risks
and uncertainties that could cause actual results to differ materially from
these statements. More information about potential factors that could cause
actual results to differ materially from those discussed in the
forward-looking statements include, but are not limited to, those stated in
CoStar's filings from time to time with the Securities and Exchange
Commission, including CoStar's Form 10-K for the year ended December 31, 2007
and CoStar's Form 10-Q for the quarter ended June 30, 2008, under the heading
"Risk Factors. In addition to these statements, there can be no assurance
that a merger of CoStar and REIS would be in the best interests of the
stockholders of both companies; that the combination of CoStar and REIS would
create substantial operational efficiencies by eliminating redundant
infrastructure and duplicative operating costs; that an acquisition of REIS at
$8.75 per share would be accretive to CoStar's previously stated EBITDA and
earnings goals; that REIS' customers would benefit from the depth and quality
of CoStar's research; and that the combination of CoStar and REIS 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. All forward-looking statements are based
on information available to CoStar on the date hereof, and CoStar assumes no
obligation to update such statements.
SOURCE CoStar Group, Inc.
Investors & Financial Analysts, Brian J. Radecki, Chief Financial Officer of
CoStar Group, Inc., +1-301-664-9132, bradecki@costar.com
