US real estate firm CoStar sweetens bid for Australia's Domain to $1.8 billion

March 27 (Reuters) - U.S. property data group CoStar ( CSGP ) raised its acquisition bid on Thursday for Domain Holdings, Australia's ( DHGAF ) second-largest real estate classifieds company, with the revised deal now valued at A$2.80 billion ($1.76 billion).

CoStar ( CSGP ) sweetened its offer to A$4.43 per share, Domain said in a statement, representing a 5.5% premium to its initial proposal of A$4.20.

The improved price also represents a premium of 1.4% to Domain's share price at close on February 21, the day CoStar ( CSGP ) made its first proposal, aiming at its first potential foray into Australia.

For years, Domain has lagged behind the larger classifieds site realestate.com.au, which is owned by News Corp-controlled REA Group. A new owner could inject investment into marketing to boost traffic, which in turn would increase its ability to charge more for listings.

The deal would provide a capital injection to Domain's 60% owner, Nine Entertainment, which also owns newspapers and free-to-air television networks. In a separate statement to the Australian Stock Exchange, Nine said that it is "supportive" of Domain's decision to allow CoStar ( CSGP ) due diligence access at the revised offer price.

Domain also said it may be able to declare a pre-completion special dividend under the improved proposal, and the firm's board has decided to unanimously engage with CoStar ( CSGP ) and facilitate appropriate due diligence access.

($1 = 1.5911 Australian dollars) (Reporting by Shivangi Lahiri in Bengaluru; Editing by Vijay Kishore and Sherry Jacob-Phillips)