Carsales denies consideration of iCar takeover bid

Carsales has refuted a report in The Australian that it is currently mulling a takeover of the ASX-listed iCar.

Entrepreneur Patrick Grove’s Kuala Lumpur-based Catcha Group co-founded iCar.

Carsales has said it is not “currently considering” a takeover bid or a selldown of its stake in ASX-listed online business iCar.

In a statement to the ASX, Carsales (CAR) responded to an article in The Australian this morning.

“The Company wishes to confirm that it is not currently considering either a takeover bid or a selldown of its shares in iCar Asia Ltd,” the disclosure said.

The report said Carsales is mulling plans to launch a takeover bid for ASX-listed online business iCar as Asia emerges as a new front in the ­battle for vehicle listings.

The Australian understands the interest is at an advanced stage, although no formal ­approach has been made to iCar, co-founded by entrepreneur Patrick Grove’s Kuala Lumpur-based Catcha Group.

It is understood iCar is on the brink of appointing takeover ­advisers after two Carsales representatives, Cameron McIntyre and Ajay Bhatia, who were working as non-executive directors at iCar, resigned suddenly from the board.

Carsales gave less than one month’s notice on Wednesday, effective December 9.

Any deal would need shareholder approval. The online classifieds business is 16.5 per cent owned by Carsales, with Catcha owning about 30 per cent.

It is also believed that an overseas-based investor has ­approached Carsales about ­acquiring its stake in iCar as part of a strategic investment to fuel expansion into Asia, where it ­operates the largest network of online automotive sites.

At its full-year results in Aug­ust, iCar forecast revenue growth of up to 23 per cent, equating to $6.75 million to $7.75m in fiscal 2017.

For Mr Grove, a takeover would mark another start-up success after Catcha last year sold its stake in Asia-focused real estate listings platform iProperty to REA Group, the operator of realestate.com.au, which is 62 per cent owned by News Corp, publisher of The Australian.

Carsales chief executive Greg Roebuck and Mr Grove could not be reached for comment.

The iCar business has long been viewed as a logical takeover target for Carsales amid dwind­ling growth opportunities in its core domestic market.

To offset these conditions, Mr Roebuck is aiming to drive higher revenues from the group’s fledgling international businesses.

In recent years, Carsales has sealed forays into the South Korean and Mexican car classified markets in addition to Brazil and South Korea.

Carsales, alongside Seek and REA Group, is viewed as one of the nation’s original and best disruption plays.

Carsales closed yesterday up 1.3 per cent, or 13c, at $9.86.