News Corp to sell 50% stake in CarsGuide to US-based company
News Corp is set to sell its 50% stake in CarsGuide following the company’s merger agreement with US-based Cox Automotive.
Subject to regulatory requirements, shareholder approval and a capital raise, the transaction is due to complete in late 2016.
In Australia, Cox Automotive runs auction business Manheim and recently acquired Deal Solutions. Along with CarsGuide, the company will now form Cox Automotive Australia.
* Dealer Solutions
One way to spin it is to say how awesome it is that a large wealthy company like Cox Automotive has “invested” in Carsguide but I wouldn’t be selling your Carsales shares just yet… News Corp would have been looking to offload them for a while because people in the auto industry know that cheap cars sell better on Gumtree (for free) and more expensive cars have a far greater audience on Carsales despite the cost (and their native app rocks). If it’s car news and videos then Car Advice is where the audience goes. You only have to look at he quality of the content.
According to the June Nielsen number Carsguide have a UA of over 1 million people and I am sure most people in the auto industry know who Cox are and appreciate they would have done their due diligence.
You can’t really compare Gumtree or Caradvice as they are very different businesses, as most people in the Auto industry know, Caradvice has very little value for dealers, although its an excellent editorial site, and Gumtree is (as you point out) at the bottom end of the scale with little value to the new car market, I do agree with you however that you shouldn’t sell your Carsales shares….yet.