iSelect has entered into a takeover agreement with Innovation Holdings Australia, which owns rival comparison site business Compare the Market.
IHA and its associates currently hold 26 per cent of iSelect. Under a scheme implementation agreement, IHA will acquire all the iSelect shares it does not already own.
iSelect shareholders will receive 30 cents a share, which represents an 87.5 per cent premium to the closing price of iShares on August 9.
The iSelect board has recommended that shareholders vote in favour of the scheme.
For long-time shareholders it is a disappointing outcome. iSelect was listed on the ASX in 2013 at A$1.70 a share and rarely reached that price again. For the past couple of years the share price has struggled along in a range between 15 and 50 cents.
The sharemarket return is a pretty accurate reflection of the poor performance of the business, which has suffered from high senior executive turnover, a string of failed ventures and regular muddled strategy re-sets.
Most recently it sold out of an Asian joint venture, iMoney, after sinking substantial funding into a business that was a consistent loss maker.
Its low point was in 2020, when it was fined $8.5 million for making false and misleading representations about its electricity comparison service.
The Australian Competition and Consumer Commission took the company to court, alleging that between November 2016 and December 2018 iSelect claimed consumers using its website would benefit from iSelect comparing all plans available from its partner retailers.
During this period, iSelect also claimed that it would recommend the most competitive plan to consumers.
In a joint submission to the Federal Court, iSelect admitted that it did not compare all available plans and did not necessarily recommend the most competitive plan, but rather limited the number of plans it compared based on the commercial arrangement it had with retailers. iSelect did not disclose this information to consumers who used its service.
The company’s 2020/21 financial report detailed lower lead generation and revenue, and a loss of $5.2 million. It lost $43.4 million the year before.