PE consortium battles Ping An for China's Autohome
Boyu Capital, Hillhouse Capital and Sequoia Capital have submitted a take-private offer for Chinese auto listings and information service Autohome. This follows Telstra agreeing to sell its majority stake in the business to Ping An Insurance Group.
The three private equity firms have teamed up with Autohome CEO James Zhi Qin to offer $31.50 per share for all outstanding American Depository Shares (ADS) - superior to the $29.55 per share that Ping An earlier agreed to pay Telstra. The PE-backed bid represents a 4.4% premium to Autohome's April 14 close and values the business at approximately $3.5 billion. The stock closed up 6.5% at $32.14 on April 15.
Qin had a 3.4% stake in the company as of March 2015, while Tiger Global had 7.8% and Telstra owned 55.6%. The Australian telecom giant bought a majority stake in Autohome in 2008 and took the company public in 2013 through an IPO that raised $133 million. Orchid Asia was another early investor in the company.
Under the terms of its deal with Ping An, Telstra would sell a 47.7% interest in Autohome for $1.6 billion and retain a 6.5% stake. Telstra CEO Andrew Penn said in a statement that as Autohome moves its business away from being purely online to featuring offline sales platforms, it would benefit from Ping An's expertise in car insurance and financing.
At present, Autohome is China's leading online destination for automobile buyers and owners. Its editorial team published a daily average of more than 440 articles, 1,500 photos and 20 video clips in 2014, while it had over 12.4 million registered users across 1,830 forums. The company also had new and used automobile listings numbering 3.6 million and 2.3 million, respectively.
As of December 2014, Autohome had 4.3 million unique users accessing its websites - autohome.com.cn and che168.com - via mobile devices every day, and a further 3.4 million using its mobile apps.
Most of the company's revenue comes from advertising and dealer subscription services. Revenue came to RMB2.13 billion ($343.8 million) in 2014, up from RMB1.22 billion the previous year, while net income increased to RMB748.7 million from RMB456.2 million over the same period.
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