Update Stockbrokers were looking to place Nine Entertainment’s stake in Carsales.com in a $570 million block trade overnight to a range of institutional investors.
The sale, should it proceed, will end speculation over the strategy of Nine’s private equity owners, CVC, who had been preparing to include Carsales in the float of the Nine television business and ACP Magazines.
One source told BusinessDay the Carsales stake was being placed at $4.92 a share last night, a 6.5 per cent discount compared with the stock’s closing price of $5.24 on Friday. Nine owns 49.1 per cent. UBS is handling the sale.
Other reports this morning said the stake sale had been completed to institutions, bringing in $562 million to cut debt and easing the need for an initial public offering this year.
Carsales recently reported an interim profit of $27.7 million, a 45 per cent increase on the previous corresponding period. Nine, in its former incarnation as Publishing & Broadcasting, became a shareholder in Carsales in 2005 when it merged its own online car classifieds business into the company for a 41 per cent holding. It made a takeover bid for the company in the following year, offering $1.21 a share.
Thanks to the growth profile of Carsales, media analysts had long anticipated that CVC would vend the asset into the Nine float to give the float more attraction, because Nine’s traditional media businesses in free-to-air TV and magazines do not promise the same growth and are highly geared.
Analysts estimate the group will post earnings before interest, tax, depreciation and amortisation of $96 million in 2011-12 and a net profit of $67 million.
Carsales has expanded overseas via the acquisition of Automotive Data Services. ADS publishes The Red Book, a guide to vehicle pricing and identification. It bought ADS in September 2007, giving it a presence in New Zealand, Malaysia, Thailand and China.
The chief executive, Greg Roebuck, has also said that he ”wouldn’t rule out” other acquisitions overseas. Asia is said to be preferred.
Michael West established Michael West Media in 2016 to focus on journalism of high public interest, particularly the rising power of corporations over democracy. West was formerly a journalist and editor with Fairfax newspapers, a columnist for News Corp and even, once, a stockbroker.