Seek to float to pursue growth opportunities

SYDNEY - Employment website operator Seek Ltd plans to raise up to A$170 million ($184 million) in an initial public offering to fund new growth opportunities.
Seek's prospectus said it expected to offer between 75 and 85 million shares at an indicative price range of A$1.80 to A$2.20 per share.

The actual number of shares to be offered will depend on the number of shares certain existing shareholders ultimately sell through a share buyback that is being conducted concurrently with the IPO.

The offer price will be set through an institutional bookbuild process, resulting in an offer size of between A$150 million and A$170 million, giving Seek an expected market capitalisation of about A$560 million.

Seek, which today appointed James Packer as its chairman, said its largest shareholder, Publishing and Broadcasting Ltd, was very supportive of the business.

"As such it is not participating in the buy-back of Seek shares but has been guaranteed an allocation of approximately 4.2 million shares to restore its shareholding in Seek to 25 per cent, the percentage it held when it originally invested in Seek in October 2003," Seek said.

Chief executive and co-founder Paul Bassat said Seek allowed recruiters access to a large audience of job candidates at very significant cost savings relative to print media and with significant functionality benefits.

According to the ANZ Job Advertisement Series, online employment advertisements in Australia have increased by a compound annual rate of 38 per cent over the last two years and 47 per cent in the year to February 2005.

Seek said this online sector industry growth has occurred during a period when employment advertising in the print media has remained relatively flat.

The funds raised through the IPO will largely be used to fund the buy-back of shares from certain existing shareholders as well as providing Seek with greater financial flexibility to pursue growth opportunities, it said.

Executive director and co-founder Matthew Rockman said Seek expected to generate revenue of A$90 million and net profit after tax (pre goodwill amortisation) of A$28.8 million in the year ending 30 June 2006.

He said the company had a clear strategy with numerous growth prospects, including growing advertising volumes in industries where its penetration is relatively low such as healthcare and education.

It also intends to grow in capital cities and regional areas where it can replicate the market share of Sydney, Melbourne and Auckland.

The company said it hoped to pursue further acquisitions to add to the two successful acquisitions made in 2004 -- NZJobs, a New Zealand online job board and SelfCert, a self-paced IT training provider, since renamed Seek Learning.

As foreshadowed in January 2005, Irvin Rockman has resigned as chairman of Seek.

Earlier this week, Seek said it would continue to be the exclusive provider of careers content to internet portal ninemsn until 2007, under an extended agreement.

- AAP