The iCar Asia Ltd (ASX: ICQ) share price is up around 45% after receiving a takeover offer from Carsome.
Takeover offer for iCar Asia
iCar Asia has received a conditional, non-binding indicative proposal from Carsome Group.
The offer is that Carsome and its associates will buy all the shares it doesn’t already own for A$0.55 cash per share.
Carsome has already entered into agreements with Catcha Group to buy around 89.5 million iCar shares (almost 20% of the overall business) from Catcha in exchange for Carsome shares. The two businesses will co-operate about the takeover offer regarding the remaining Catcha shares in exchange for Carsome shares.
If you haven’t heard of Carsome before, it’s a private business that is based in Singapore. It operates an integrated automotive e-commerce platform across Malaysia, Indonesia, Thailand and Singapore.
The proposal is subject to a number of conditions including due diligence, receiving joint bid relief from ASIC, the finalisation of Carsome’s financing arrangements, shareholder approval and court approval.
What is iCar’s response?
The ASX company has appointed an independent board committee to consider the takeover offer. Patrick Grove and Luke Elliot have recused themselves from all iCar board considerations of the proposal.
Goldman Sachs has been appointed as the financial adviser and Herbert Smith Freehills has been picked as the legal adviser.
iCar said it will continue to keep the market informed, though it pointed out that there is no certainty that the proposal will result in a transaction being agreed and put forward for shareholders to vote on.
The discussions with Autohome remain ongoing.
Summary thoughts on the iCar Asia share price
The takeover offer price would represent the best iCar share price over the last year and the highest since August 2016.
If I were a shareholder, I’d be happy if the the takeover went ahead and then consider putting the money into some other ASX growth shares
