Trilogy Ent. Offers $15.8M For Autobytel Inc

A suitor has emerged for Autobytel Inc.

The Irvine, Calif., online automotive retailer is now the target of a $15.8 million, or 35 cents per share, offer by data management software company Trilogy Enterprises Inc. of Austin, Texas, the bidder announced Monday, April 20.

"We are pleased to offer a significant premium to Autobytel's shareholders," said Trilogy senior vice president Sean Fallon in a statement. "The automotive industry is experiencing an unprecedented decline and we believe that Autobytel must take steps now to ensure its shareholders receive the highest value."

Trilogy already owns 7.4% of Autobytel's stock and is its second-largest shareholder. The company said its offer represents a 32% premium to the stock's 30-day average closing price. The bid offers a 17% premium to Autobytel's Friday closing price of 30 cents.

Trilogy is making the offer, which expires midnight May 19, through its Infield Acquisition Inc. subsidiary.

The tender was detailed in an April 20 letter to Autobytel CEO Jeffrey Coats and Autobytel's board.

"We believe Autobytel is facing a crucial period in its corporate existence," the letter said. "Autobytel has historically struggled to create an independently viable business. Shareholder cash and value is at stake."

The letter said Autobytel has experienced continual operating losses and declining revenue for the last three years.

The company recorded an $84.3 million operating loss for 2008, significantly more than the $17.2 million loss it reported in 2007.

Senior research analyst Steve Denault at Northland Securities Inc. in Minneapolis said he felt Trilogy had identified Autobytel as an opportunistic target.

Autobytel owns Web sites where consumers can sell, buy and research cars. The auto industry slump has hurt it.

"Most of what Autobytel does is lead generation for car sales. They generate it on their own and in turn sell it off to a dealer," he said.

Denault added it would complement Trilogy's business management software offerings.

The bid comes three months after Autobytel called off an RBC Capital Markets-led auction without a sale.

After announcing it would cut 35% of its workforce, Autobytel announced Sept. 26 it had tapped RBC to explore options, including an asset or company sale. Autobytel said it would also consider acquisitions at the time.

"The reason that nothing happened while they were on the block in my opinion is that offers didn't place enough value on the core business," Denault said.

Denault speculated that competitor Dealix Corp. might emerge as a rival bidder. Dealix is a unit of Seattle car marketing firm Cobalt Group Inc.

Autobytel and Trilogy did not return calls seeking comment.

Autobytel has a market capitalization of $19.9 million.

Clients of management-owned Trilogy include British Airways plc, Chrysler LLC, Ford Motor Co., and Nissan Motor Co. Ltd.