Story image

Trade Me shares halted as Fairfax sees $1.5 bln payday

17 Dec 12

Shares in Trade Me have been halted as Australian publisher Fairfax Media sells its remaining 51 percent in the New Zealand online auction site.

The shares have been halted to let a bookbuild take place for the sale of Fairfax's shares, Trade Me said, without disclosing a price.

Media reports have put the sale price at A$3.05 a share, a 5.3 percent discount to the A$3.22 closing price on the ASX. The dual-listed shares closed at $4.05 in New Zealand on Friday.

Trade Me stock is rated an average 'hold' based on eight analyst recommendations compiled by Reuters, with a median target price of $4.10.

"On completion of the sale, Fairfax Digital Holdings NZ Ltd will no longer be a shareholder of Trade Me," the company said in a statement.

At that price, Fairfax would reap some A$616 million from the sale, or $768.3 million in New Zealand dollar terms at today's cross-rate of 80.18 Australian cents per NZ dollar.

The latest tranche of Fairfax's exit will mean the media group will have pulled out some $1.5 billion since last year's partial float and subsequent sell-down and also through saddling Trade Me with $166 million debt.

That doesn't include the $220 million dividend Fairfax extracted in 2011 to cancel related party debt owed to the auction site.

Trade Me has been considered the jewel in Fairfax's crown, growing revenue and underlying earnings since the media group bought it under former chief executive David Kirk in 2006 for some $700 million, a price considered steep by analysts at the time.

The sale is seen as a move to pay down Fairfax's mounting debt as it overhauls its business away from printing presses and into the digital world, and is part of a shift away from indebtedness after Rupert Murdoch said the publishing arm of his media empire will be debt-free after the News Corp demerger.

The Australian media group, whose titles include New Zealand's Dominion Post, Press and Sunday Star Times newspapers, wrote down the value of its goodwill and mastheads by A$2.8 billion in the latest financial year, on top of the A$1 billion charge it has taken since 2010.

Shares in Fairfax fell 5.6 percent to 51 Australian on Friday, and have plunged 29 percent this year. The stock is rated an average 'hold' based on 13 analyst recommendations compiled by Reuters, with a median target price of 44 Australian cents.

By Paul McBeth - BusinessDesk

Survey reveals CX disconnect is risky business
Too much conversation and too little action could lead companies to neglect, lose, and repel their very lifeblood, according to Dimension Data.
Eaton launches portal and revamped partner programme
The portal has many features including a training academy, monthly promotions, rewards and a 24-hour turnaround on deal registrations.
8x8 appoints A/NZ channel senior manager
Joins 8x8 after time at Oracle, Avaya and Optus to managing 8x8’s growing team of partners across the region.
Interview: Chillisoft and LogRhythm ready for the NZ channel
ChannelLife talks with Chillisoft CEO Alex Teh and LogRhythm A/NZ sales director Simon Howe about their plans for Kiwi cybersecurity partners.
Check Point launches hyperscale network security solution
With Check Point Maestro, organisations can scale up their existing Check Point security gateways on demand.
Trend Micro’s telecom security solution certified as VMware-ready
Certification by VMware allows communications service providers who prefer or have already adopted VMware vCloud NFV to add network security services from Trend Micro.
Logitech wins awards for the art of good design
What makes a good design? Logitech may know a thing or two about that.
Chillisoft nabs LogRhythm as next major vendor
Chillisoft signs on the global SIEM provider as it continues to expand its solution portfolio for the growing cybersecurity market.