Scout24, the German online classifieds company, is said to have rejected a 4.7 billion euro ($5.34 billion) takeover bid from the private equity firms Hellman & Friedman and The Blackstone Group L.P. (NYSE: BX). The rejection is seen as likely leading the way to a potential bidding war, after a Financial Times report in December 2018 detailed Scout24’s interest in “exploring a sale and that private equity firms were looking at bidding for the company.”
The company released a statement announcing the joint takeover bid to its shareholders, which offered 43.50 euros per share. This represented only an 8% increase from Scout24’s closing price on Friday, January 18, 2019 of 40.14 euros.
“The management board of Scout24 AG has rejected the proposed offer price as inadequate,” the company detailed in its statement.
Among the potential competitors Hellman & Friedman and Blackstone are rumored to potentially face in their bid for Scout24 is Silver Lake, a U.S.-based private equity firm. Silver Lake is a technology-focused firm with around $45.5 billion in combined assets under management and committed capital.
Hellman & Friedman Previously Owned a Controlling Stake in Scout24
One of the private equity firms involved in the takeover bid, Hellman & Friedman, previously held a controlling stake in Scout24. Deutsche Telekom sold the controlling stake to Hellman & Friedman in 2013, who later listed Scout24 on the Frankfurt Stock Exchange in 2015.
Hellman & Friedman was founded in 1984. Over the company’s 30+ year history, the firm has raised over $35 billion in committed capital and invested over 80 companies. Overall, Hellman & Friedman focuses on services-oriented businesses and assets.
Scout24 Q4 Earnings Results Could Help Drive Bidding Interest
During the company’s third quarter 2018 earnings period, Scout24 reported earnings per share of 0.34 euros on net income of 36.23 million euros. Third quarter earnings per share came just under analyst estimates of 0.35 euros. However, analysts see earnings continuing to grow during the fourth quarter 2018 and first quarter 2019.
Analysts estimate fourth quarter earnings per share to come in at 0.43 euros; before jumping to 0.48 euros per share in the first quarter 2019. Scout24 will report fourth quarter earnings on February 12, 2019.
If the company can show earnings per share beating estimates and continuing growth in net income, the private equity bidding war could certainly heat up even more. Keep an eye on Scout24’s fourth quarter earnings release, which will no doubt be widely watched.
Scout24 owns and operates the ImmobilienScout24 digital marketplace in Germany. AutoScout24 is another one of the company’s digital marketplace that serves other areas of Europe. “We are inspiring people to make their best decisions on finding a home and a car,” according to the company’s description.
