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19th of January 2018

Automotive



Private equity firm purchases 10% stake in Cars.com

Private equity firm Starboard Value has purchased a 9.9 percent stake in Cars.com, under the notion that the auto sales website is undervalued with potential to increase profit margins, The Wall Street Journal reported Monday, citing unnamed sources.

The activist investor sees opportunity for growth when the online auto marketplace "no longer has to share a large portion of its sales with the media companies that once controlled it," The Journal reported, adding that it sees potential for the company to be bought out by a private-equity firm.

Cars.com, which spun off from Tegna Inc., the broadcaster once part of Gannett Co., faces competition from TrueCar Inc., AutoWeb Inc. and CarGurus.

"Since our spin in May 2017, we have maintained an active and transparent dialogue with our shareholders, and are always open to constructive ideas to enhance shareholder value," Cars.com said in a statement emailed to Automotive News.

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