Online vehicle marketplace iCar Asia (ASX:ICQ) has come into the sights of a Singapore-based suitor after receiving a takeover offer this morning.

The company advised that Carsome Group Pte Ltd has pitched a conditional, non-binding and indicative proposal to acquire all the shares of ICQ at 55c a pop.

Shares in iCar Asia ripped higher by more than 40% at the opening bell. But its current trading price of ~43c is still a material discount to the offer price — a possible indication that more work needs to be done before the deal gets over the line.


iCar Asia M&A

iCar Asia runs its business through 11 online car marketplace websites that operate across Malaysia (three sites), Indonesia (four sites) and Thailand (four sites).

As Carsome Group jockeys for control of the business, it has already signed an agreement to acquire a non-controlling 19.99% stake in ICQ from a separate company, Catcha.

If Carsome’s ICQ deal goes ahead, both Carsome and Catcha have agreed to cooperate with respect to Carsome’s acquisition of additional ICQ shares held by Catcha.

And in order for that to happen, both companies still need to get clearance from Australia’s corporate regulator, ASIC, for the deal to proceed.

For its part, iCar Asia said it’s commissioned an independent board committee to review the proposal.

Along with ASIC approval, a number of other things all need to happen before the deal is approved.

Before the deal is put to iCar shareholders for approval, Carsome will carry out confirmatory due diligence. It also needs to complete its own financing arrangements to fund the acquisition.

Taking all that into account, iCar concluded that there “is no certainty the proposal will result in a transaction being agreed”.

As a result, it recommended that existing iCar shareholders “do not need to take any action at this time”.

iCar Asia’s 4C filing for the March quarter showed it booked net operating cash outflows of $1.63m, largely due to staff costs of more than $3m, on operating cash receipts of $4.68m.