Investing.com-- Domain Holdings Australia Ltd (ASX: DHG ) said on Thursday it will engage with a bid from U.S. peer CoStar Group Inc (NASDAQ: CSGP ) after the latter increased its offer for the Australian classifieds firm.

Costar is now offering A$4.43 per Domain share, up from its prior offer of A$4.20, although the new offer is at a small discount to Domain’s Wednesday close of A$4.47.

The deal values Domain at nearly A$2.80 billion ($1.76 billion).

Domain said the offer was Costar’s “best and final price.” The real estate listings firm said its board will engage in due diligence with Costar over the deal after a discussion with major shareholder Nine Entertainment Co Holdings Ltd (ASX: NEC ). Nine holds a 60% stake in Domain.

Domain also recommended shareholders take no action on the deal.

Costar had in February approached Domain with a takeover bid, and had also disclosed a 16.9% stake in the Australian firm.

Costar is an American property analytics and information firm, and has no direct presence in Australia. Its bid for Domain likely represents a foray in the Australian property market, which has seen years of strong price growth amid a housing supply crunch in the country.