Sharechat Logo

Trade Me attracts another suitor with a sweeter offer

Wednesday 5th December 2018

Text too small?

Trade Me has attracted a second private equity suitor willing to pay $2.56 billion for the country's dominant online marketplace. 

The Wellington-based company today said it's received a non-binding indicative offer from Hellman & Friedman at $6.45 a share, trumping an earlier indicative bid from UK private equity firm Apax Partners at $6.40 a share, or $2.54 billion. 

Apax is doing due diligence on the New Zealand business, but Trade Me is allowed to engage with parties lobbing in unsolicited bids. The Kiwi firm's board has decided it will also engage with Hellman & Friedman on the new bid, which is subject to certain conditions and completing due diligence. 

"The board has decided that it is in the interests of Trade Me and consistent with its fiduciary obligations to also engage with Hellman & Friedman on the new proposal," it said. "The board notes that there is no certainty either proposal will result in an offer, or any other transaction, for Trade Me."

Trade Me was trading at $5.10 before the Apax bid was made public on Nov. 21, and gained 1.8 percent to $6.16 today. 

The company's small debt load has been cited as an attraction for potential private equity buyers, who typically leverage up their target companies. Trade Me's strong brand and network are also seen as giving it a sustainable advantage to rivals breaking into the local market. 

When the Apax offer emerged, Morningstar Research gave it a 50/50 chance of success, given the early stage of the negotiations and that due diligence was a high hurdle to cross. It put a $5.70 fair value on Trade Me's stock because of the premium. 

Hellman & Friedman is a US private equity fund manager which focuses on large-scale equity deals in select sectors. Last year it was one of several bidders for Australian publisher Fairfax Media Group and its online real estate listings unit Domain. Fairfax is a former owner of Trade Me. 

(BusinessDesk)



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report