Telstra sells down Autohome stake

The telco has made $2.1bn by selling down most of its stake in the Chinese car vendor.

Signage at a Telstra store in Sydney on Tuesday, March 22, 2016. Telstra customers have taken to social media again to vent their frustration about another service outage, the fourth in two months. (AAP Image/Mick Tsikas) NO ARCHIVING

Telstra has sold almost its entire stake in Chinese car sale website Autohome for $US1.6 billion ($A2.1bn).

The telco has offloaded a 47.7 per cent stake in the online business to Ping An Insurance Group at $US29.95 a share.

The price reflects a premium of 12.7 per cent to Autohome’s average share price over the last 60 days and Telstra chief executive Andrew Penn said that it was the right time for the telco to extract maximum value for its shareholders, as Autohome transitions from a pure online business to one with a substantial offline presence.

“Autohome has played an important role in building our presence in the Chinese technology sector and we look forward to working with Ping An and Autohome management as a minority investor,” Mr Penn said.

Telstra has retained a 6.5 per cent interest in the group.

Autohome, founded in 2005 by entrepreneur Li Xiang, is China’s leading online automotive sales platform. Telstra bought 55 per cent of Autohome’s parent company in 2008 for $76 million as part of a broader investment in four internet businesses in China.

Telstra expects to book an accounting gain of approximately $1.8bn in the second half of fiscal 2016 once the sale is completed.

Mr Penn added that despite the selldown, Telstra was firmly committed to its growth strategy in Asia.

“Autohome has been an excellent investment for Telstra and demonstrates the opportunities that exist in the Asia Pacific region,” he said.