Axel Springer eyes auto division as Scout24 mulls split

05 July 2019 - 03:08 pm UTC

by Amy-Jo Crowley in London, with analytics by William Cain

Axel Springer is eyeing the acquisition of Scout24's auto division as the latter mulls a separation of its car and property classifieds operations, two sources familiar with the situation said.

 

Scout24 has engaged in recent discussions about splitting its ImmobilienScout24 home listings in Germany and AutoScout24 car listings across Europe, the sources said. This comes after a proposed takeover of Scout24 by Hellman & Friedman and Blackstone at EUR 46 a share collapsed due to insufficient take-up by Scout24 shareholders. Scout24 is now looking at selling its property and auto divisions separately, the sources said.

 

Axel Springer, which itself the subject of a buyout by KKR, is keen to acquire the automotive business, with a transaction possible by the end of the year, the sources said. A buyout of Axel Springer’s minority investors by KKR could provide Axel with flexibility to acquire AutoScout24, the first source said.

 

A split of Scout24 has long been speculated, a third source familiar said. This source predicted that Scout24 will not exist in its current form in the next year or so, but cautioned that KKR and Axel Springer management were likely focussed on the buyout of Axel Springer at the moment.

 

KKR announced last month a EUR 63 per share public offer for Axel Springer. Friede Springer, who controls 42.6% of the shares, and CEO Mathias Döpfner, who owns 2.8% of the shares, have agreed with KKR to retain their shareholdings in Axel Springer and entered into an investment agreement with KKR.

 

It makes sense for Axel to target just the automotive business as it would face anti-trust issues in acquiring the homelistings one as well, two bankers following the situation said.

 

ImmobilienScout24 and Axel Springer’s real estate business are the number one and number two home listings operators in Germany, respectively, one of the bankers noted.

 

Scout24’s home listings business would likely attract interest from strategics and private equity firms, one of the sources and the bankers said. News Corp and Adevinta could look at the home listings business, one of the bankers added.

 

AutoScout24 has trailing-12-month sales and EBITDA of EUR 188m and 105m, respectively. Auto-Trader, the unit’s closest Europe-listed comparable, trades at 21.5x EBITDA, implying a potential valuation for the Scout24 division of EUR 2.25bn, according to Dealreporter analytics. Scout24 has an enterprise value of EUR 6bn and trades at 20.1x EBITDA.

 

Scout24 and KKR declined to comment. Axel Springer did not respond to requests for comment.