U.S. private equity firm Hellman & Friedman is nearing a deal to acquire the auto-trading unit of German classifieds company Scout24 AG, people familiar with the matter said.

The proposed purchase by H&F, which beat out several rival suitors for AutoScout24, is set to value the business at more than 2.5 billion euros ($2.8 billion), according to the people. A transaction could be announced as soon as Monday, the people said, asking not to be identified because the information is private.

Scout24 confirmed in a statement Monday it’s in “advanced negotiations with a number of bidders” including H&F. A sale of AutoScout24 could be concluded “within a short period of time,” it said. The purchase price offered by H&F “significantly exceeds” 2.5 billion euros, according to the statement.

Shares of Scout24 rose as much as 5.3% in Frankfurt trading Monday, hitting an intraday record of 58.25 euros.

European companies, under attack by activists, have been pruning their portfolios to sharpen the focus on their core businesses. These castoffs have attracted the interest of private equity firms, which are sitting on $1.4 trillion in uninvested capital, according to data compiled by Bloomberg.

Permira, Apax

Earlier this year, Nestle SA agreed to sell its $10 billion skin-care business to a consortium led by EQT AB. Smiths Group Plc’s sale of its $3 billion medical business is attracting interest mostly from private equity firms, people with knowledge of the matter said last month.

Permira and Apax Partners were also among suitors competing to acquire AutoScout24, Bloomberg News has reported. No final agreements have been reached, and negotiations could still fall apart, the people said. A representative for H&F declined to comment.

H&F knows the business well. The firm and Blackstone Group Inc. originally bought a controlling stake in Scout24 in 2014 from Deutsche Telekom AG before taking the company public in 2015. They also made a full takeover offer for Scout24 earlier this year. Investors $5.5 Billion Bid for Germany’s Scout24 rejected their bid, which valued the whole company at 4.9 billion euros, and they ruled out improving their offer.

Scout24 said in November that it was evaluating options for the auto-trading unit, including a sale or a spinoff. Activist investor Elliott Management Corp. has demanded that the company split in two to better focus on its real estate business. Elliott, backed by billionaire Paul Singer, wrote in an August letter that Scout24’s planned 300 million-euro share buyback plan was “grossly lacking in ambition.”


Source: Bloomberg

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