Scout24 share price rockets in February after board approves takeover bid
Scout24, an online classified listing company, has seen its share price increase by double-digit figures in February, following approval from its board of a 5.7 billion-euro takeover bid from its former private equity owners Hellman & Friedman (H&F) and Blackstone. Scout24 is known for its automobile and property listing sites.
Scout24’s share price jumps by 11% on the back of the news!
Source: Yahoo Finance
What’s the appeal of Scout24? Largely, it’s powerful property classifieds site. This site has come under threat recently, as the German government has stated that it’s looking at ways to lower the fees associated with buying a house.
Currently, estate agent fees are paid by either the buyer alone or the buyer and seller together. But one option under review would see the fees paid for solely by the person who enlists that agent (in other words, the seller). Since this would effectively penalise people for using estate agents, the likelihood is it would see people opt to try and sell their houses without agents’ help. And that, in turn, would heavily affect classified listings, as agents are responsible for the bulk of them.
However, many observers have raised a pertinent question: if people aren’t using estate agents, won’t they just have to buy the classified ads themselves? In other words, whatever the government decides (and it is far from clear, yet, what that will be), it looks like Scout24’s very lucrative business will remain an important fixture of the German property market.
In a statement about the takeover bid released in mid-February, Scout24 said: “After diligent and thorough evaluation both the management board and the supervisory board of Scout24 have reached the conclusion to support the takeover offer.”
Dominion holds Scout24 in its Global Trends Ecommerce Fund.
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