Telstra sells 47.7 per cent stake in Autohome to Ping An

Telstra sells 47.7 per cent stake in Autohome to Ping An

Telco makes $US1.6 billion in the sale

Telstra CEO, Andrew Penn

Telstra CEO, Andrew Penn

Telstra has sold 47.7 per cent of its stake in Chinese car online business, Autohome, for $US1.6 billion to Ping An Insurance Group.

The telco will still have a 6.5 per cent interest in Autohome.

The sale price of $US29.55 per share reflects a premium of 12.7 per cent.

In 2008,Telstra bought a 55 per cent stake in Sequel Media, Autohome’s parent company, paying $76 million at the time.

Telstra CEO, Andrew Penn, said it was the right time to realise significant value for Telstra shareholders.

“As one of the largest financial services companies in Asia with a nationwide presence and customer base in China, Ping An will be a strong partner for Autohome,” Penn said.

“For the next phase of the company’s development, as Autohome moves away from being purely online to operating an offline sales platform in China, it will benefit from a strategic investor in Ping An which has expertise in car insurance and financing.

“Autohome has played an important role in building our presence in the Chinese technology sector and we look forward to working with Ping An and Autohome management as a minority investor in the next stage of the company’s evolution.”

Telstra expects to book an accounting gain on completion of the sale of approximately $1.8 billion in the second half of FY16, the final amount being subject to a number of adjustments, including foreign exchange rates and the value of its retained interest.

The deal is subject to any required Chinese regulatory approvals and Autohome Board approval.

Penn said that Asia remains one its key elements in its growth strategy.

“We continue to grow our enterprise services businesses in the region with strong consolidation opportunities in our Pacnet business, joint venture in Indonesia and the exploration of future growth opportunities,” Penn said.

“In terms of proceeds from the sale, we remain committed to our capital management strategy. We will take a balanced approach in considering the use of these funds, which includes potential capital management options.”

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Tags Telstraonline car sales

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