Takeovers may be unfolding at the big end of town, with recent bids for Coca-Cola Amatil, AMP and Link Administration Holdings, but merger and acquisition activity is also keeping investment bankers busy at the smaller end of the market.
Chinese vehicle sales website business Autohome has tapped advisory firm Rothschild for its bid to buy the Australian-listed iCar Asia for about $215m, as revealed on Friday.
The Asian car website business iCar Asia, meanwhile, is working with investment bank Goldman Sachs and law firm Herbert Smith Freehills.
Autohome, which is listed in New York with a $US11.5bn ($16.3bn) market value and is dominant in the Asian market, has been in talks with iCar Asia for at least several months and the latest 50c-a- share offer is at a 52 per cent premium to the last close of 33c.
It is understood to have drawn support from the target’s board.
However, the big question remains as to the next move of one of its major shareholders, the $5.3bn Australian-listed Carsales.com, which holds about 10 per cent of the stock.
Interest in car websites has emerged on the back of soaring used car sales amid the pandemic.
Carsales.com has always said it wants to invest in profitable businesses, and iCar Asia is now breaking even. The situation may see Carsales.com launch a rival offer for the business.
Another major shareholder of iCar Asia is Patrick Grove’s Catcha group, which owns 28 per cent of the company.
Meanwhile, OptiComm is expected to come back into focus this week, with many watching to see if superannuation fund Aware Super lobs a higher offer in a continuing bidding war with Uniti Group.
A shareholder meeting to vote on Uniti’s offer is being held on Friday, and last time around, Aware Super made its move just before the vote was due to take place.
Expectations are that Aware Super will return with a higher offer, with OptiComm’s share price on Friday closing 6c higher at $6.70.
It is understood that funding Uniti’s bid are Australian banks CBA and Westpac, while Aware Super is using the NAB and has ANZ in the background, along with some banks out of Japan and Europe.
Last month, Uniti Group lifted its offer to $5.20 cash and 1.07 Uniti shares for each OptiComm share in a scheme of arrangement.
The move was a response to a $6.50-a-share takeover bid put forward by Aware Super with a minimum acceptance condition of 50.1 per cent. Aware Super had trumped an earlier $5.85-a-share offer by Uniti.
Many investors in Uniti also own shares in OptiComm and believe a merger makes sense.
OptiComm provides internet infrastructure for some new developments that choose to install its fibre internet rather than NBN, and is considered “core-plus” infrastructure by some infrastructure funds.
Uniti is an internet infrastructure and service provider that has so far focused largely on the apartment market.
The major attraction for Uniti is OptiComm’s pipeline of contracts to connect new housing estates to the internet.
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