By Paul McBeth
Dec. 13 (BusinessDesk) - Trade Me suitor Hellman & Friedman has dropped out of the race to buy New Zealand's dominant online marketplace.
Rival Apax Partners yesterday got into the box seat with a $6.45 per share offer winning over Trade Me's board to agree to a scheme of arrangement. The $2.56 billion offer matched an indicative bid from US private equity firm Hellman & Friedman and was an improvement on the $6.40 a share pitch initially put forward by Britain's Apax.
Trade Me shares slipped 6 cents, or 0.9 percent, to $6.31 after the company said Hellman & Friedman did not intend to make a better offer.
Hellman & Friedman was granted access to Trade Me's books and the Kiwi company's board can consider an unsolicited superior offer, provided they gave Apax the opportunity to counter. If Trade Me doesn't stick to the terms of the agreement, it faces a $19.2 million break fee, or the equivalent of 4.8 cents per share.
A scheme of arrangement has a lower bar to get shareholders over the line, requiring 75 percent support and at least half the company's votes cast, as opposed to the 90 percent threshold needed in a formal takeover to enforce mop-up provisions. The High Court and the Overseas Investment Office will also need to approve the transaction.
A vote is expected to be held in April next year.
Trade Me's board is restricted from seeking another buyer and has to unanimously endorse Apax's offer provided it falls within an independent valuation range.