Trade Me has confirmed it’s received a “preliminary, non-binding, indicative proposal” from London-based equity group, Apax Partners.
The marketplace has reportedly received a $1.73 billion takeover bid (NZ$2.54 billion) from a British company looking to purchase a 100 percent stake in the online auction site. A statement released on New Zealand’s share market has revealed an offer has been made for a cash price of $6.40 per share, 22.5 percent more than the company’s shares were trading at when the market closed on Tuesday ($5.10 per share).
The proposal is subject to a number of conditions, including due diligence, but the offer alone has seen Trade Me’s shares surge by 18.8 percent to $6.06.
Apax Partners’ offer puts the marketplace’s value at NZ$2.5 billion, which represents $500 million extra value than its sharemarket value when trading closed on Tuesday.
In its statement on NZX, Trade Me said it has provided Apax with exclusive access to its books until December 12 to determine whether the business wants to make a firm offer. Until then, Trade Me can engage with other interested buyers. The online auction site says it will keep the market updated on any material developments.
Grant Davies, an investment advisor at Christchurch wealth management firm, Hamilton Hindin Greene, is confident shareholders will support the offer.
“New Zealand investors have been pretty happy to take the quick buck in the past, and with Trade Me not exactly in the high growth category anymore, it’s probably likely to go through, subject to the conditions of the offer, of course, which we don’t have exact details on yet.”
The New Zealand-based marketplace generates NZ$250 million in revenue, with an EBITDA of NZ$164 million in FY18. The company’s biggest shareholders include Hyperion Asset Management and Investors Mutual.
The former Fairfax Media-owned business originally listed on the NZX for $2.70 a share.
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