May 9 (Reuters) - Australia's Domain Holdings

said on Friday U.S. online real estate firm CoStar ( CSGP )

would acquire the property classifieds company for an implied

enterprise value of A$3 billion ($1.92 billion).

Under the deal, CoStar ( CSGP ) and its unit, which already owns a

16.9% stake in Domain, will acquire the remaining shares in the

company at A$4.43 apiece, a 4.2% premium to the stock's last

closing price on Thursday.

Domain may also decide to declare a special dividend of up

to A$0.10 per share, which will reduce the deal value by that

amount, it said.

The deal marks CoStar's ( CSGP ) first foray into the Australian

market and could transform the landscape in a sector where

listing volumes have sagged as high living costs slowed the

country's hot housing sector but are improving with interest

rates coming down.

For years, Domain has lagged behind the larger classifieds

site realestate.com.au, which is owned by News Corp-controlled

REA Group.

Domain's board has unanimously recommended that shareholders

vote in favour of the proposed deal, which is also subject to

Foreign Investment Review Board (FIRB) and other regulatory

approvals.

Domain's 60% owner, Nine Entertainment ( NNMTF ), said in a

separate statement that the deal "appropriately reflects the

strategic value" of its interest in Domain and it intends to

vote in favour of the deal in absence of a superior offer.

Nine expects to receive about A$1.4 billion in cash proceeds

from the deal, and may decide to pay a special dividend in the

range of 47 to 49 Australian cents per share.

As of 0044 GMT, Domain's shares were up 2.9% at A$4.375,

their highest level since late-March, while Nine's shares were

trading up 4%.

($1 = 1.5640 Australian dollars)