Transaction Capital in talks to take control of WeBuyCars

JSE-listed Transaction Capital said on Wednesday that it is in talks to increase its stake in WeBuyCars to 74.9%, a move that will give it control over the South African online car marketplace.

Transaction Capital Motor Holdco is in “formal negotiations” with WBC Holdings, the holding company of WeBuyCars, and its shareholders to “conclude a transaction in the short term that will result in TCMH holding 74.9% of the shares in and acquiring control of WBC Holdco”, it said.

WeBuyCars buys and sells used vehicles and uses data- and technology-led e-commerce and physical infrastructure, supported by a national footprint of “vehicle supermarkets” and “buying pods”.

News of the plan to increase its stake comes just nine months after Transaction Capital announced it was buying a 49.9% non-controlling stake in WeBuyCars. That deal came soon after the Competition Tribunal blocked Naspers from acquiring a controlling 60% stake in the specialist car-buying service earlier in 2020.

Transaction Capital said at the time of the 49.9% stake acquisition that it would pay a maximum of R1.84-billion for the stake, based on an enterprise value of WeBuyCars of R3.69-billion. It said, too, that it had the option to take a controlling stake at a future date.

Blocked

On 27 March 2020, the Competition Tribunal blocked Naspers’s OLX Group from acquiring 60% of WeBuyCars in a deal that would have been worth R1.4-billion. The Competition Commission, which investigates and assesses large mergers before referring them to the tribunal for a decision, recommended that the proposed transaction be prohibited as, it said, it was “likely to substantially prevent or lessen competition”.

The merging parties opposed the commission’s recommendation and disputed its theories of harm to competition and its ultimate conclusions. They argued that the proposed transaction should be approved subject to certain conditions they had tabled, but their arguments were rejected by the tribunal.  — © 2021 NewsCentral Media