Cars.com Plunges as Review End Dashes Starboard Hopes of Sale
(Bloomberg) -- Cars.com shares plunged to their lowest ever on Monday after the online car listing platform said it has decided to remain an independent company after a completing a strategic review, dashing investors' hopes for a possible buyout.
The review process, which was first announced on Jan. 16, was concluded with no actionable bids for the company, Cars.com said in a statement. The review followed a call from shareholder Starboard Value, urging the company to improve its performance or consider selling itself. A representative for Starboard was not immediately available for comment on Monday.
Starboard is the second biggest holder in the stock, after Blackrock, and holds a 9.58% stake, according to Bloomberg data.
Cars.com said it received unsolicited calls from a number of interested parties in the summer of 2018, and subsequently hired JPMorgan to launch a review, that ultimately involved 29 parties. Shares of the company had initially surged on the news of retaining JPMorgan as well as the review, but have since declined. The stock fell a further 43 percent in New York on Monday.
The company also lowered its revenue forecast for the full year, citing continued reductions in advertising by automakers and delayed certifications from car companies that help to facilitate sales to thousands of franchise dealers on a preferred basis. Revenue for the year is now expected to fall 6% to 9%.
--With assistance from Scott Deveau.
To contact the reporter on this story: Esha Dey in New York at edey@bloomberg.net
To contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, Morwenna Coniam
©2019 Bloomberg L.P.
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