Trade Me directors may look for offshore growth, Fairfax chief says
Sept. 9 (BusinessDesk) – The board of a partially-floated Trade Me Ltd. may look outside New Zealand to boost growth, according to the boss of owner Fairfax Media Ltd.
Fairfax chief executive Greg Hywood told reporters in Melbourne the future strategy of the online auction site will be up to its new board, which will be headed by Hywood’s predecessor David Kirk, the Sydney Morning Herald reported.
That strategy “might be outside New Zealand,” he said in response to questions. “There’s more to do in New Zealand.”
Hywood was speaking at a Melbourne Press Club lunch, and said it will increasingly invest in long-form broadcast journalism as it moves away from being a traditional newspaper company.
Last month, Fairfax said it will sell between 30% and 35% through an initial public offering on the NZX, which may extend to an Australian listing.
Deutsche Bank analysts estimate a listing of Trade Me may raise between A$205 million and A$256 million. Those funds will be used to repay debt and lift dividends.
Fairfax bought the online auction site under Kirk’s leadership in 2006 for some $700 million in a deal that was sneered at by commentators at the time. Since then, Trade Me has been a jewel in the crown for Fairfax, steadily increasing revenue.
The Australian media company, which publishes the Dominion Post, Press and Sydney Morning Herald newspapers, made a loss of A$401 million, reflecting a A$651 million write-down on the value of its mastheads.
That added to the A$513 million impairment it took in 2009 against mastheads and goodwill that resulted in a loss that year and saw the company's credit rating cut below investment grade to BB+.
Fairfax’s shares were unchanged at 83.5 Australian cents on the ASX yesterday, and have shed 40% of their value this year.