Fairfax sells 51% of Trade Me shares

Fairfax Media has sold its remaining 51% stake in Trade Me, receiving NZ$810m in the process.

That is according to Australian media reports, who say the media company's desire to pay down debt has become a priority over keeping a stake in the online auction site.

While neither Fairfax or Trade Me made formal announcements, investment bank UBS is reported to have been retained to sell the stake, approaching investors over the weekend.

Shares were offered at a rumoured AU$3.05 as Fairfax battles a full-year net loss of AU$2.73 billion this year.

Board member Gina Rinehart expressed her support for the sale, with the company's largest single shareholder happy to see the sale through to cut down debt.

But not everybody in the industry agrees with the move, with investor Lance Wiggs, a key advisor in Trade Me's sale during 2006, telling NBR Online the move is "absolutely bonkers."

"Buying Trade Me was the smartest thing Fairfax did in recent years," Wiggs said.

"Selling all of it, if true, is the saddest.

"For investors they now have two very distinctly different companies.

"One needs to go through a rebirth, the other is a giant freed.

"Fairfax should emerge in a few years a lot smaller, a lot more digital and pondering how they sold the one asset that was leading the way.

"They [Trade Me] need to remain long term and customer focused, and not fall into the quarterly returns trap."

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