Classifieds. A bid for the 20-year Munich-based digital classifieds group Scout24 by US private equity companies Hellman & Friedman and Blackstone has failed to get the backing of 50% of shareholders, despite the support of the board. The bid was worth €5.7bn, which fell short of the expectations of institutional investors in the company which has no dominant single shareholder. Scout24 is best known for its Immobilien Scout24 property listings in Germany and pan-Europe AutoScout24 car listings.
The bid had marked a return by Hellman & Friedman and Blackstone, which had overseen Scout24’s IPO in 2015.
Scout24 was founded in 1998 by Beisheim Holding Schweiz AG. AutoScout24 and ImmobilienScout24 became the first online marketplaces. It then launched FinanceScout24, JobScout24 and FriendScout24. In 2001, it expanded into Italy and Spain. It acquired Immobilien.net, a leading digital real estate marketplace in Austria, and FlowFact, a provider of software for real estate agents, and Easyautosale. Its expansion has continued, particularly in the Netherlands, Germany and Austria.
In 2018, the company EBITDA of €291.5m on revenues of €531.7m (55%).
If the private equity bid for Scout24 had succeeded, it is believed the new owners would have immediately bid for the $1bn-revenue eBay classifieds business which is up for sale. Most of its revenue comes from outside the US and it has 10 brands including Gumtree and Kijiji across 25 countries. More than 50% is in the German market, where eBay Kleinanzeigen is more popular than Craigslist. It is estimated that the eBay classifieds group could be worth $8-12bn (about one-third of the US parent’s total market value).
Axel Springer has declared an interest in bidding for the eBay classifieds. That is assumed to mean that the company (whose Immowelt competes with Kleinanzeigen) must be exploring a tie-up with a private equity firm, perhaps on the lines of an earlier digital classifieds partnership with General Atlantic. But Springer has also long been close to Hellman & Friedman which has been a shareholder, so it may already be happening. A Springer acquisition of eBay classifieds would be subject to challenging competition investigations in Germany and the EU.
Alternative bidders would include private equity firms, but also News Corp which has strong property digitals, especially in Australia and the US. In the frame also will be Adevinta (the recent $6bn classifieds spin-off from Nordic news group Schibsted) which operates ‘boot sale’ digital marketplaces in 16 countries in Europe, Latin America and North Africa. Its leading brands include Leboncoin in France, InfoJobs (Spain), Shpock (UK), OLX (Brazil), Subito (Italy) and Jofogás (Hungary). Might there really be a chance of a Springer-Adevinta merger to create an unrivalled global classifieds leader?