CoStar, RentPath Drop Acquisition Deal After FTC Lawsuit
According to an FTC antitrust lawsuit, the deal would “eliminate price and quality competition that benefits both renters and property managers.”
NEW YORK – CoStar Group Inc. no longer plans to acquire rival property listing company RentPath Holdings after the deal fell apart under pressure from a Federal Trade Commission (FTC) antitrust lawsuit aimed at blocking the sale.
RentPath, the owner of websites like Rent.com and Apartment Guide, announced late last week that it was canceling the acquisition agreement with CoStar Group, a commercial real estate data firm that operates Apartments.com and ApartmentFinder.com. In February, CoStar announced that it agreed to buy RentPath, which had filed for Chapter 11 bankruptcy protection, for $588 million in an all-cash deal.
However, the FTC sought to block the acquisition, saying it would significantly increase CoStar’s already large presence in the rental market.
“The acquisition will eliminate price and quality competition that benefits both renters and property managers,” Daniel Francis, deputy director of the FTC’s Bureau of Competition, said in a statement. Francis said the competition between CoStar and RentPath helps to keep advertising rates on their platforms low.
Moving forward, RentPath said that its Chapter 11 plan will continue to be backed by lenders. The company is working to restructure more than $650 million in debt, The Wall Street Journal reports.
Source: “RentPath Drops Acquisition Deal With CoStar After FTC Antitrust Lawsuit,” Tech Crunch (Dec. 30, 2020)
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