Login | Register
Profile | Log out
logo

  • Home
  • News
  • Opinion
  • Other
    • Market Updates
    • Explainers
    • Satire
  • About
  • Contact Us
    • Contact
    • Get Covered
    • Posting Guidelines
  • Subscribe
Submit An Article

Latest Articles

  • Biotron Expands into Anaesthetics with Sedarex Acquisition and $2.5m Raise
    Biotron Expands into Anaesthetics with Sedarex Acquisition and $2.5m Raise
    • News

  • DroneShield Boosts Defence Capability with $13 Million Adelaide R&D Investment
    DroneShield Boosts Defence Capability with $13 Million Adelaide R&D Investment
    • News

  • Stakk Secures T-Mobile Contract to Power Super App Expansion
    Stakk Secures T-Mobile Contract to Power Super App Expansion
    • News

  • Medibank Backs Emyria with Landmark Depression Care Deal
    Medibank Backs Emyria with Landmark Depression Care Deal
    • News

  • NoviqTech Launches Quantum Intelligence Products, Opening Path to Enterprise-Grade Quantum AI
    NoviqTech Launches Quantum Intelligence Products, Opening Path to Enterprise-Grade Quantum AI
    • News

  • BRE Wins Final Permit to Advance Rare Earth Pilot Plant in Brazil
    BRE Wins Final Permit to Advance Rare Earth Pilot Plant in Brazil
    • News

  • Harris Technology eyes profitability as refurbished tech sales surge
    Harris Technology eyes profitability as refurbished tech sales surge
    • News

  • QIC Fund Backs Ark Mines with $4.5m to Accelerate Sandy Mitchell Development
    • News

  • Swift Secures $2.4m Chevron Contract to Extend Entertainment and Support Services
    Swift Secures $2.4m Chevron Contract to Extend Entertainment and Support Services
    • News

  • FBR’s tech could help reduce housing construction-related cost pressures
    FBR’s tech could help reduce housing construction-related cost pressures
    • News

iSelect receives takeover offer as online comparisons market no longer what it was

  • In News
  • August 10, 2022
  • Alfred Chan
iSelect receives takeover offer as online comparisons market no longer what it was

If you’re one of the 1.6 million Australians that has used online price comparison website iSelect (ASX: ISU) to compare utility prices, phone plans or insurance quotes – you’re about to have your personal details sold, with the Company having received an offer from their largest competitor to acquire all shares at an 87% premium. 

What makes the offer, at $0.30 per share, most remarkable is that it comes from Innovation Holdings Australia (IHA) which attempted a similar takeover in August 2020 before it was called off citing a changed environment brought upon by the COVID-19 pandemic. 

On that occasion, the offer from IHA was at $0.40 per share. 

When the takeover was called off, iSelect took it upon themselves to buy ISU shares on-market when increasing their share holding from 29% to 35%. But having done so without consulting the ACCC, the consumer protection regulator launched its own inquiry given that IHA owns rival price comparison site comparethemarket.com.au. 

At the time, ACCC Commissioner Stephen Ridgeway said: “We are considering whether the completed and proposed acquisitions are likely to substantially lessen competition. iSelect is a competitor to Innovation Holdings in offering comparison services for a range of financial and energy products to consumers and minority stakes held between competitors can give rise to competition concerns.” 

Since then, the market has changed notably with a major business transformation that seeks to captilise of legislative changes around Consumer Data Rights (CDR) with a raft of consumer-friendly regulation introduced over the past three years. 

The model is a major transformation from the price comparison business previously operated where iSelect revenue was primarily generated from affiliate marketing where they would receive fees for any customer that signs up via the website, to a service provider. The business model came unstuck when the ACCC issued iSelect a fine for $8.5 million in October 2020 for misleading its customers between 2016 to 2018. Customers affected were led to believe they were getting the best price comparisons, when in fact they were only being recommended ones that iSelect would gain affiliate marketing commissions on. 

In the aftermath of those events, and the rise of comparethemarket.com.au, ISU shares have continued to fall from $2.00 in 2018 to have last traded at $0.16. 

For the six months ended 31 December 2021, iSelect reported $44.6m in revenue which was a 14% decline on the previous year, but cost cutting measures flowed down to the bottom line where net profit after tax of $474k was a big improvement on the previous year’s $3.6m loss. 

Having waited two years before restarting discussion, IHA’s offer comes at a 25% discount to their previous offer but at $0.30 per share, the iSelect board still unanimously recommends that shareholders accept the offer. 

“The Board has carefully considered the strategic options available to iSelect in light of the certainty for shareholders that this all-cash offer provides,” said iSelect Chairman, Brodie Arnhold. 

“The Directors of iSelect unanimously recommend that shareholders vote in favour of the Scheme, subject to there being no superior proposal and the independent expert concluding that the Scheme is in the best interests of iSelect shareholders. 

“The Scheme provides an opportunity for shareholders to realise a significant premium to market value for their shares and provides the certainty of an all-cash offer.” 

At $0.30 per share, the offer values iSelect at $72 million with IHA already owning 26% of iSelect. Major shareholders Thorney Investment Group (14.34%) and Microequities (9.50%) have already indicated they will vote in favour of the takeover which makes it a mere formality to gain shareholder approval at that price. 

The biggest hurdle will come via the ACCC which will need to sign off on the deal where it is expected they will have reservations again. Should all be signed off by regulators, iSelect expects the takeover will be finalised by March 2023. 

Can someone check if the domain controlthemarket.com.au is available? 

  • About
  • Latest Posts
Alfred Chan
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
Latest posts by Alfred Chan (see all)
  • Harris Technology to expand refurbished tech division amid rising demand from cost-conscious Australians - April 30, 2025
  • Harris Technology secures major investment from Taiwan’s FSP Technology at 100% premium - March 10, 2025
  • ARC Funds acquires 30% of auzbiz Capital as latest direct-to-investor marketing venture - October 8, 2024
  •  
  •  
  •  
  •  
  • asx isu
  • comparethemarket
  • comparison sites
  • IHA
  • Innovation Holdings Australia
  • iselect
  • thorney investment group
  • utility comparison
  • News

Leave a Comment

You must be logged in to post a comment.

  • About
  • Latest Posts
Alfred Chan
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
Latest posts by Alfred Chan (see all)
  • Harris Technology to expand refurbished tech division amid rising demand from cost-conscious Australians - April 30, 2025
  • Harris Technology secures major investment from Taiwan’s FSP Technology at 100% premium - March 10, 2025
  • ARC Funds acquires 30% of auzbiz Capital as latest direct-to-investor marketing venture - October 8, 2024

Login or register for free to access unlimited reading

Register Now!
  • About
  • Latest Posts
Alfred Chan
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
Latest posts by Alfred Chan (see all)
  • Harris Technology to expand refurbished tech division amid rising demand from cost-conscious Australians - April 30, 2025
  • Harris Technology secures major investment from Taiwan’s FSP Technology at 100% premium - March 10, 2025
  • ARC Funds acquires 30% of auzbiz Capital as latest direct-to-investor marketing venture - October 8, 2024
  • News

  • Opinion

  • Satire

  • About

  • Contact Us

  • Subscribe

The content published on this website is solely for general information purposes and is not to be construed as financial advice. Should you seek financial advice you should consult with an appropriately qualified person. Opinions expressed on this site are subject to change without notice and The Sentiment who produced this content is under no obligation to keep the information current. The Sentiment, affiliated companies & associates may have a conflict of interest with companies discussed on the website due to commercial arrangements, for example they may be shareholders in the company, be engaged by them to assist in investor communications or receive commission/brokerage for funds raised.

Copyright © 2020 The Sentiment. All rights reserved.
Subscribe

Enter your email address below to subscribe to The Sentiment’s weekly newsletter, highlighting the top news, research, opinion and satire articles shaping ASX investor sentiment.

The Sentiment respects your privacy and will not spam you. View our privacy policy here.