iCar Asia shares leap 40% on $250 million takeover offer

A takeover bid for ASX-listed online car sales venture iCar Asia by rival Singaporean car e-commerce platform Carsome has pushed the shares up more than 41% in early trade today.

The non-binding acquisition proposal from Carhome at $0.55 cents a share pips a previous offer last year at $0.50 cents from China’s Autohome.

iCar Asia (ASX: ICQ) shares are up 12.5 cents in early Tuesday trade to $0.425 on news of the deal, which values the business, owned by Patrick Grove’s Catcha Group, at around $250 million. 

iCar operates online automotive portals in Malaysia, Thailand and Indonesia. While revenue grew 37% in the 12 months to April 2021 to $5.8 million, the company still posted an EBITDA loss of A$1,8 million for the year, down on 2020 $2,75 million loss. Malaysia and Thailand were profitable, and losses in Indonesia were reduced as the business stripped out costs. Catcha Group propped up iCar’s cash flow with a new A$10 million loan facility in 2021.

Local online car marketplace Carsales.com.au has around a 10% stake in iCar Asia.

Carsome is Southeast Asia’s largest integrated car e-commerce platform, operating in Malaysia, Indonesia, Thailand and Singapore selling new and used cars online. It offers everything from car inspection to ownership transfer and financing as part of the sales deal. Founded in 2015 and privately owned, Carsome sells around 100,000 cars annually worth around US$800 million.

Under the acquisition terms, Carsome will acquire a 19.9% stake – 89,456,448 shares – in iCar Asia, in exchange for Carsome shares.

The acquisition is conditional on Carsome and Catcha obtaining joint bid relief from Australian regulator ASIC, as well as a range of regulatory, shareholder and court approvals. Carsome also has to complete its due diligence on the business.

In its statement to the ASX today, iCar Asia said its discussions with Autohome remain ongoing and it was not certain that the Carsome deal will even be put forward to iCar shareholders for consideration.

Catcha Group co-founders Patrick Grove and Luke Elliott have recused themselves from all iCar board considerations of the Carsome offer.

The company has appointed Goldman Sachs as financial adviser and Herbert Smith Freehills as legal adviser to respond to the Carsome offer.