Publisher tipped in bid for Trade Me

Sam Morgan

Magazine publisher ACP Media is chasing online auction website Trade Me, a source says.

It comes as bankers confirm persistent interest in the site from buyers.

However, Trade Me founder Sam Morgan said yesterday he would not be able to comment if talks were going on and played down the prospect of any sale.

"You can read into that, no - at the moment," he said. "Clearly, we have discussions with all sorts of people at different times about different things, but that's not on the cards at the moment."

In seven years, the auction site has signed up almost 1.1 million members and was rated the country's fastest-growing company last year with a 10-fold increase in revenue.

One banker said there had been talk of a couple of approaches, but there was a big gap in the price Morgan wanted and what buyers were willing to pay. There was interest at about $30 million to $40 million, but the price tag was at least $100 million. Others thought the company could fetch far more - heading towards $500 million.

Michael Carney, author of Trade Me Success Secrets, published last month, said if Morgan was interested in selling, the timing made sense.

"Now would be a good time - while they are still showing runaway growth, which is not going to happen forever," he said. 'They're going to just run out of Kiwis to sign up."

One analyst said it could almost be too late to get the top price. "We're on the verge of recession or slowdown, so if [Morgan] has got a willing buyer, now's probably a good time."

The company has been signing up new members at a rate of 50,000 a month.

Carney said there were only a handful of potential buyers including ACP, Xtra-owner Telecom and newspaper publishers like Fairfax or APN (owner of the New Zealand Herald and nzherald.co.nz). "But you could never count out Google or Ebay," he added.

Asked why ACP's name was being linked to his business, Morgan said: "I guess the major newspapers [are] seeing their classifieds affected by us, so that would potentially be a logical partner - it has shown to be overseas." But he also said the pairing was "just a rumour".

A spokesman for ACP, which is owned by Kerry Packer's Publishing & Broadcasting (PBL) and owns titles including Woman's Day and Metro, would not comment.

In October, ACP launched a rival to Trade Me, called www.sellmefree.co.nz. It offers sellers of fewer than 15 items free use, whereas Trade Me charges small success fees and some listing fees.

In Australia, PBL has also shown a keen interest in online businesses. It has 25 per cent of jobs website Seek, which controls about 60 per cent of the A$65 million ($70 million) online employment classifieds market, and recently merged its car sales website with a rival to form the dominant player in the market.

Apart from ACP's site, Telecom has launched Ferrit, a shopping portal which links to retailers' own websites, and APN's The Aucklander launched www.bidnsave.co.nz to run an auction of more than $700,000 of new goods.

But Carney said Morgan was not concerned about corporate rivals.

"Back in May, Sam said to me, 'We're much more afraid of the guy in the garage'."

About Trade Me
* Founded by Sam Morgan in 1998.
* It generates 300,000 visits a day.
* More than $300 million of goods change hands a year.
* Some 9700 houses are listed for sale. More than 32,000 cars are also up for auction. About 500,000 other items get listed as well.