Telstra, the Australian telecoms and media company, raised $320 million after selling an 8% stake in Autohome, the US-listed Chinese car-trading website.
The group offloaded 6 million shares in Autohome at $42.50 per share, a 1.8% discount to the November 19 close of $43.26. Autohome shares dropped 8% from the time books opened on November 14 up to November 18 but have since recovered.
“The stock actually rallied and closed 5.2% up, which is quite unusual for US follow-ons,” noted one banker close to the deal. “But the stock had come off so much in the past few days so the move up was expected.”
The total deal-size was 8.5 million shares. The remaining 1.5 million shares, all primary, netted Autohome $100 million. An exercised greenshoe option will add an additional 15% to the base deal.
Telstra, which previously owned 65% in the Chinese car-trading website, now owns 57% of the Beijing-based company.
Books opened late on Wednesday night under the leads of Deutsche Bank and Goldman Sachs, after a week of roadshows in Hong Kong and the US, but did not close until mid-Thursday morning as allocations were still being finalised.
More than 90 lines participated in the book, with bankers saying it was roughly evenly split between hedge funds and long-only investors. The majority of the hedge funds were located in the US, while the long-only investors in both in the US and Asia.
Bankers noted the strong participation from existing shareholders looking to boost their holdings in Autohome, which has a market cap of roughly $5 billion and is trading at a discount to BitAuto, another Beijing-based company and its closest comparable.
The sale was a home-run for Telstra, which purchased 55% of Autohome’s parent in 2008 for $76 million. At the time of the IPO, the Australian telecoms company owned a 66.2% stake that was reportedly worth $2 billion.
