Fairfax to sell up to 35% of Trade Me in New Zealand float; Kirk brought back
By Paul McBeth
Aug. 26 (BusinessDesk) – Fairfax Media Ltd., which publishes the Dominion Post and Sunday Star-Times newspapers, will sell up to 35% of online auction site Trade Me. Ltd. in a float on the New Zealand stock exchange.
The media group, which today posted a A$400 million annual loss, intends to sell between 30% and 35% through an initial public offering on the NZX, and may extend that to an ASX listing, chief executive Greg Hywood said in a statement. 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%,” 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.