iCar, which was 22.9 per cent owned by Carsales in 2014 before being diluted to now about 10 per cent, was also a potential takeover target of Carsales.
The iCar business operates across Thailand, Malaysia, Singapore and Indonesia. It claims 12 million users a month delivering 900,000 leads each month to dealers from an inventory of 400,000 used cars.
Now Malaysian-based Carsome has bid for 19.9 per cent of iCar, seeking 89.45 million shares at $0.55 each to value the stake at $49.2 million.
It kicked iCar’s capitalisation to $212.14 million, up from $128 million five days earlier. The share price ended Wednesday at $0.48, up from $0.29 on Friday July 9.
Carsome plans to buy the shares from Catcha Group, iCar’s biggest shareholder with a 30 per cent stake.
In return, Catcha will become a shareholder of Carsome, boosting the latter’s valuation to more than $A1.34b.
Following the share swap, Carsome will offer to buy the remaining 80.1 per cent of iCar from existing shareholders, a transaction that reports from South-East Asia said were valued at more than $A300 million.
Carsome CEO Eric Cheng said in an interview with Singapore newspaper The Straits Times that it was the “first step towards consolidation to form the largest digital automotive group in South-East Asia.”
“We visualise a platform that could deliver end-to-end solutions for anyone – from searching a car to buying and selling, finance, insurance and after-sale services.”
He did not discuss possible plans to enter the Australian market.
The South-East Asian online car market has recently been the subject of intense competition.
In June, rival Carro raised $A482 million led by SoftBank Vision Fund II, a funding round that pushed its valuation to more than $A1.34 billion.
South-East Asian classifieds startup Carousell said earlier this year it would invest aggressively to grow its car-trading business in the region.
The proposed acquisition would combine iCar’s car listing sites and Carsome’s second-hand transaction platform across Indonesia, Malaysia, Singapore and Thailand.
It would also make Carsome one of the most valuable marketplaces for used cars in South-East Asia.
In a statement, Catcha Group CEO Patrick Grove said: “Nine million people visit the iCar portal a month to search for a car, and it would be powerful to have many of them trading in and buying cars digitally via the Carsome platform.
“The combined company has a long way to go.”
Carsome’s proposed offer is subject to shareholder approval and Australia’s ASIC.
iCar has appointed Goldman Sachs Group as its financial adviser and Herbert Smith Freehills as its legal adviser, according to iCar’s stock-exchange notice.
Carsales bought a 19.9 per cent stake in iCar in 2013 and increased that to 22.9 per cent by paying $A7.18 million for an extra 3.0 per cent stake.
In 2016 it held 16.5 per cent, diluted because of capital raisings by iCar. Late in 2016, the Carsales representatives on the iCar board resigned and Carsales announced it had taken the investment off its books and would no longer account for it as an asset.In 2020, it was believed that Carsales still held 11.87 per cent of iCar. GoAutoNews Premium this week asked Carsales for its current shareholding in iCar but had not received a response by the time of publication.
By Neil Dowling