Carsales.com.au begins $800 million float process

Carsales.com.au has reportedly begun its initial public offering that values the company at between $800 to $850 million, while a full prospectus of the deal could be released as early as next week.

The site’s largest shareholder, PBL Media, will not sell its 49.5% stake in the group despite its high levels of debt, but The Australian has reported that the remaining shareholders (mostly made up of car dealers and staff) will sell about half of their holdings.

That means around 25% of the company will be sold into the float, which would make the initial public offering worth around $200 to $215 million. According to The Australian, 230 million shares are expected to be sold at between $3.50 and $3.70. The IPO is being managed by Macquarie Equity Capital Markets.

Chairman Wal Pisciotta, who holds 16% of the company, is expected to sell half his stake into the float, while chief executive Greg Roebuck, who owns 4.5% of the group, will reportedly sell less than half his shares.

Carsales recently posted a net profit of $30.7 million, up by 64% from the previous year, and has said a sharemarket float is the best way for its smaller car dealer investors to gain a capital return.

The site’s good financial results led PBL chief executive Ian Law to say last week that the site is “a terrific asset with good growth prospects”, leading the company to retain its shares despite its own $4 billion debt burden.