By BLOOMBERG / Pic By BLOOMBERG
FRANKFURT • Scout24 AG has confirmed it will look to sell or separate its auto-trading business, after facing months of pressure from activist investor Elliott Management Corp.
The process is ongoing, the German online classified company’s CEO Tobias Hartmann said at the company’s capital markets day in Munich, Germany, without going into further detail.
The announcement comes after months of pressure, led by Paul Singer (picture)’s Elliott, for Scout24 to split in two to better focus on its real estate business.
In a letter in early August, Singer lashed out at the firm, saying a €300 million (RM1.38 billion) share buyback plan announced at the time was “grossly lacking in ambition”.
Auto1 Group GmbH, the German online used-car platform, has teamed up with private-equity firm Hellman & Friedman LLC to bid for the auto-trading unit, Bloomberg News previously reported.
The duo is competing with buyout suitors including Permira and Apax Partners. First-round bids valued AutoScout24 at more than €2 billion.
Scout24 also announced yesterday it expects revenue to grow between 8% and 11% in 2020. That growth should accelerate to low-to-mid-teens in 2021 and to mid-teens by 2022.
Analysts polled by Bloomberg News on average expect overall revenue to grow by about 11% to roughly €685.2 million next year.
But some have recently warned revenues could come under pressure next year, when a new real estate agent law, dubbed Bestellerprinzip, is coming into effect.
The new rule “is not a long-term concern anymore (as we have been arguing for a while), but it might impact short-term property trading and hence, agent budgets negatively in the next months,” analysts from JPMorgan Chase & Co said in a recent note. — Bloomberg