Fairfax to sell part of Trade Me

Fairfax plans to sell between 25 and 30 per cent of TradeMe via an initial public offering.
File photo
Fairfax plans to sell between 25 and 30 per cent of TradeMe via an initial public offering. File photo

Trade Me's parent company Fairfax Media Limited has today announced plans to sell between 30 per cent and 35 per cent of Trade Me via an initial public offering.

Fairfax announced the proposal via a notice to the ASX this morning.

The IPO remains subject to financial market conditions, but if it goes ahead it would see Trade Me become a stand-alone, publicly listed company on the New Zealand Exchange (NZX).

Consideration would also be given to an ASX listing, the company said.

The media group, which today posted a A$400 million annual loss, said that will raise between $350 million and $525 million based on recent valuations of the business, which will be used to repay debt and increase dividends.

Former Fairfax chief David Kirk, who made the decision to buy the auction site in 2006 for some $700 million, will be brought back into the fold to act as non-executive chairman of the group.

"Fairfax will continue to benefit from the strong growth profile of Trade Me and through a shareholding of at least 65 per cent," chief executive Greg Hywood said.

"The decision to pursue the IPO of Trade Me is a further step in reshaping the Fairfax portfolio and adopting a more flexible corporate structure to maximise shareholder value."

Reports of a partial float emerged in June, when Fairfax general manager Frank Sufferini told Radio New Zealand Trade Me's future was being reviewed along with the rest of the business.

The media group has been shedding staff and selling off assets in a bid to slow losses from dwindling advertising revenue.

- Susie Nordqvist / BusinessDesk

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