The third point, de show received agreements with Costar. As they can build value

Business: Castor -Group It is a provider of online real estate, information and analytics in real estate markets. It manages its business in two segments: North America, which includes the United States and Canada, and the international, which includes Europe, Asia-Pacific and Latin America. Its main brands are Costar, World Commercial Real Estate data provider, analytics and news; Loopnet, Commercial Real Estate Market; Poartments.com, platform for rental apartments; and homes.com, residential real estate market.

The stock market value: $ 32.64b ($ 77.39 per share)

De Shaw Vernication: N/a

Possession of the third item: 2.04%

Average cost: N/a

Activist comment: De Shaw-it’s a large multi-strategic fund that is not known historically for activity. The firm is not an investor activist. Rather, it uses activity as a conjunctural tool in situations where the firm considers it useful. De Shaw is looking for a solid business in good industries, and if it determines the lack of performance within the control, it will take an active role. It puts a private, constructive interaction with management, and as a result often comes to an agreement with the company before its position is even public.

The third point is a multi-stratum hedge fund, founded by Dan Loba, which selectively took the position of the activists. Lob-one of the real pioneers in the field of shareholders’ activity and one of several activists who formed what became the current activity of shareholders. He invented the letter of a poisonous handle at a time when it was often necessary. As he changes, he moved from the poisonous handle to the force of the argument. The third moment belongs to the board of the council in companies such as Skry and Disney, but also not shy about launching a proxy -beaten when ignored.

Upon April 6The Costar Group has concluded a Dee Shaw support agreement and a third point in connection with the Council update and corporate management improvements. This includes the addition of Christine McCarty, John Berisford and Rachel Glaizer as directors to advice; Michael Klein, Christopher Naveta and Laura Kaplan from the Council. It also includes the appointment of Louise Sams as an independent council and the creation of the capital distribution committee. De Show and the third point agreed to follow certain rules for checking and voting.

The Costar Group is a provider of online real estate, information and analytics in real estate markets. It manages large brands, including Costar Suite, Loopnet, Poarsments.com and Homes.com. Approximately 95% of the company’s revenue comes from the main business, which greatly consists of Costar Suite and apartments that use high barriers to entry, strong pricing power, own data and business models based on periodic profits and very predictable free cash flow. From this dynamics, this business has historically traded the prize to its information services, but is now trading according to them.

This regression in the company’s assessment is largely stemming from the Costar aggressive investment in your housing market, Homes.com in which it has acquired May 2021.. Unlike the main package of Costar and Perertment.com, Homes.com lacks accurate competitive advantages and is facing intense competition from well -customized peers like Zillow. However, the company distracts about $ 75% from $ 1.3 billion in interest, taxes, depreciation and depreciation from the main business to finance $ 900 million losses from Homes.com. As a result, the capital expenses increased by 878% compared to 2021 to 2024, it is only 347% only by 2024.

Enter De Shaw Dee Shaw and the third point that separately concluded support contracts with Costar in connection with The base of the board and improvements in corporate management. This includes the following: (I) adding Christina McCarty (former Disney Financial Director), John Berisford (former S&P Global President) and Rachel Glaizer (former ETSY financial director); (ii) retirement to the chairman Michael Klein, Christopher Naveta and Laura Kaplan from the Council; (III) Appointment of Louise Sams Independent Chair; and (IV) Creation of the Capital Distribution Committee, which will be joined by Berisford and McCarty. Activity has settlements that should calm the investor activist to remain silent, and there are real settlements that mean real consent with the activist about how to continue. This is the last. First, the obvious sign is that the three directors were replaced by eight people, which is a big update (approximately 40% of the council). But less obvious and more speech is the structure of the settlement and which was replaced. First, the transaction was developed as a replacement for directors, not the addition of three directors, which is more common in calculations, especially with relatively smaller councils (ie eight directors for the company $ 30 billion). Secondly, the three directors who were replaced were three of the four longest directors, with the exception of the CEO, and one of them has been chairman of the campaign since 1987. In addition, the new board chairman is the second newest director for settlement. It is not only a board update in the name but also in essence.

There is also a more subtle settlement provision, which, in our opinion, offers the most understanding of what can follow the leverage – the formation of the capital distribution committee, which will consist of four directors, two of which will be new directors De Shaw/Third Point. This is a clear situation with something that is often observed in activist-based business companies, which is very profitable, but the profit is used to finance the unrefined business. But the plan here is likely not to completely get rid of the Homes.com business, otherwise we would see the Committee on Strategic Operations. This capital distribution committee is likely to be tasked with finding ways to finance the Homes.com business without using the cash flow from the main business. This may include a spinaf business with the maintenance of ownership, selling parts of a strategic investor, or receiving some third capital. The capital distribution committee is also instructed to evaluate international expansion. Costar has already taken steps to expand internationally, including the acquisition of ontheMarket.com The end of 2023One of the three most visited residential real estate portals in the UK. Company too Recently offered To acquire Australian real estate Cressifications firm during domains. The capital distribution committee will certainly evaluate this potential operation, as well as others and give recommendations to the recently restored council. Ultimately, the goal here is to appear with the main coastre business, and the international growth prospects are estimated at a multiple of $ 1.3 billion, which corresponds to $ 30+ EBITDA, which it has historically received. This will lead to approximately $ 45 billion in the value of the enterprise compared to about $ 30 billion.

Both the third point and de Shaw are not purely activists, but multi-strategic firms that often use activity as a conjunctural tool. The third point, founded by Dan Lob, is a real pioneer of shareholders, but in recent years used it more economically as dictated by a market setting and affordable opportunities. De Shaw is relatively new for activity, but over the past few years the firm has shown that it is as experienced in activity as in other strategies with which it was as successful in its multistotegic fund. While they both settled with the company in their own agreements, they are definitely like -minded, but do not act as a group. It is encouraging development, and this is what we often see today, but rarely see 15 years ago: it puts a joint -stock value above the ego. The third point showed that Costar has 2.04%. De Show did not reveal his position, but as a hedge -fond of $ 70 billion, he does not take small positions of the activists: we could expect it to be at least the size of third points.

Ken Skvir is the founder and president of the 13D monitor, an institutional scientific and research service for shareholders’ activity, as well as the founder and managers of the 13D -activist fund portfolio, a mutual fund that investes in the portfolio of 13D investments.