The buyout of Scout 24 has come to a stand-still

Scout 24 investors are uncertain about the return of the company's former private equity owners

The 5.7 billion euro ($6.4 billion) bid for German classified advertising group Scout24 AG from Blackstone Group LP and Hellman & Friedman looks less generous after the market rally. Investors are pushing back. Add the fact that the private equity firms are trying to reclaim a company they recently took public, and the chance of failure is ticking higher by the day.

The 46 euros-a-share cash offer is a 27 percent premium to where the target was trading in December before takeover talks emerged. European stocks are up 12 percent since. Peers Auto Trader Group Plc and Rightmove Plc are up 27 percent and 22 percent. If Scout24 had done just as well the deal would offer almost no premium, regardless of its punchy valuation multiple.

Blackstone and Hellman & Friedman say they won’t raise in response to shareholder demands. No wonder: The holdouts are fighting a lonely battle. There’s no rival buyer. Scout24’s supervisory board, led by Hans-Holger Albrecht, boss of music streamer Deezer SA, isn’t championing the minority cause. It agreed to a transaction relatively quickly and continues to back the offer.

It’s this deal or no deal. Even if cunning lawyers can find a way to backtrack on the “no sweetener” statement, budging now would torch the bidders’ credibility. The acceptance condition of 50 percent plus one share is as low as it can be. It can’t be cut to adjust for weak support, as happened amid resistance to the 2017 private-equity bid for drugmaker Stada Arzneimittel AG.

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