Telstra has agreed to sell a 47.7 percent stake in Chinese online business Autohome to Ping An Insurance Group for USD 1.6 billion. Telstra will retain a 6.5 percent interest in Autohome after completing the transaction. The sale price of USD 29.55 per share reflects a premium of 12.7 percent to Autohome’s volume weighted average price over the past 60 days.
Ping An is expected to support Autohome's expansion into the offline car retail market in China, offering its expertise in financing and insurance. Completion of the sale is subject to Chinese regulatory approvals and Autohome board approval. The latter may not be forthcoming, as shortly after the announced deal with Ping An, Autohome CEO James Zhi Qin announced a higher offer with private equity firms Boyu Capital, Hillhouse Capital and Sequoia China. They have bid USD 31.50 a share or USD 3.6 billion in total for Autohome.
Telstra said it expects to book an accounting gain of AUD 1.8 billion in the second half of fiscal 2016 on the sale to Ping An. It has yet to comment on the rival bid. Telstra said it will take a "balanced approach" in considering the use of the sale proceeds, "which includes potential capital management options”.
Source: http://www.telecompaper.com/news/telstra-sells-stake-in-chinas-autohome-for-usd-16-billion--1138932