Telstra says $1.6 billion Autohome stake sale is being challenged by minority shareholders

Reuters
A man and power lines are reflected in a Telstra poster adorning a public telephone in Sydney, Australia, August 13, 2015. REUTERS/David Gray

SYDNEY (Reuters) - Australia's Telstra Corp Ltd on Wednesday said its $1.6 billion sale of a controlling stake in Chinese website operator Autohome Inc to Ping An Insurance Group Co of China Ltd is being challenged by minority shareholders. The telecommunications firm said it intends to contest a petition some minority shareholders filed in the Cayman Islands. It did not identify the shareholders or elaborate on their objections. Telstra does not expect the action to disrupt the sale, a person close to the telco told Reuters, declining to be identified due to the sensitivity of the matter. Telstra declined to comment further on the matter when contacted by Reuters. Telstra, Australia's biggest phone company, on April 15 agreed to sell 47.7 percent of Autohome's total issued shares to Ping An. Within hours, an offer to acquire Telstra's stake at $31.50 a share was made by a consortium of Autohome chief executive and minority shareholder James Qin, and private equity firms Boyu Capital Advisory, Sequoia China Investment Management and Hillhouse TBC Holdings. The offer valued the automotive information website operator at about $3.35 billion. Telstra rejected the offer - a 6.6 percent premium over the amount agreed with Ping An - saying Autohome would benefit from Ping An's expertise in car insurance and financing as it moves away from being purely online and begins offline sales in China. After the sale, Telstra would retain 6.5 percent of Autohome. CEO Qin owned 2.9 percent as of February, regulatory filings showed. Autohome has been controlled by Telstra since its U.S. stock exchange listing in 2013, when its value was about $3.2 billion. (Reporting by James Regan; Editing by Christopher Cushing)