The iCar Asia Ltd (ASX: ICQ) share price is tumbling during Tuesday's session. This comes after the online car platform owner released an announcement to the market earlier.
At the time of writing, the iCar share price is trading 7.81% lower at 44.25 cents, having hit an intra-day low of 42.5 cents earlier.
Here's what iCar announced and why investors are jumping out.
iCar share price drops on takeover update
Shares in iCar have taken a tumble after the company provided an update on its takeover offer from Carsome. Prior to this morning's open, iCar announced it has agreed to provide due diligence access to Carsome.
The company's board cited the decision in order to progress Carsome's binding acquisition transaction for iCar shares.
After submitting a conditional, non-binding acquisition proposal last week, Carsome had requested a period to undertake its confirmatory due diligence.
iCar's board reiterated that the proposal remains subject to a number of conditions, including completion of due diligence by Carsome.
In addition to due diligence granted to Carsome, iCar also updated shareholders on its discussions with Autohome Inc.
Late last year, US company Autohome launched a takeover bid for iCar at 50 cents per share. According to today's announcement, Autohome has decided to terminate discussions in relation to its acquisition of iCar.
More on iCar's proposed takeover
iCar owns and operates a network of automotive portals and online marketplaces. The company currently operates in Malaysia, Indonesia and Thailand.
Last week, the iCar share price enjoyed a huge boost after the company received a conditional, non-binding indicative proposal from Carsome.
Carsome, a private business based in Malaysia, offered to buy all shares in iCar it doesn't already own for 55 cents per share cash.
Under the proposal, Carsome will buy 89.4 million iCar shares from digital investment group Catcha Investment Corp. Carsome will then pay Catcha with newly issued Carsome shares.
At 55 cents per share, Carsome has valued iCar at around $243 million.
The proposal saw iCar shares rocket around 41% on the day.
Since the start of the year, shares in iCar have soared by almost 19% including today's price action.
