Fairfax expected to sell out of Trade Me
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Fairfax Media is raising $NZ811.43 ($A650 million) by selling its remaining 51 per cent holding in New Zealand online auction site Trade Me to reduce debt.
UBS is seeking to sell the shares to institutions at $A3.05 each, The Australian newspaper, which is owned by News Ltd, reported on Saturday.
The sale price is a 5.3 per cent discount to the stock's closing price on Friday.
Trade Me was founded by internet entrepreneur Sam Morgan, who sold the business to Fairfax in 2006.
Trade Me listed on the New Zealand and Australian share markets in December 2011 when Fairfax sold down a third of its holding, and in June it reduced its holding further to 51 per cent.
If the sale of its remaining stake goes through, Fairfax will have realised $NZ1.37 billion for its $NZ750 million purchase of Trade Me, New Zealand media reported.
Fairfax shares rose strongly last Thursday on reports of a broker upgrade even though rival APN News & Media had just published a profit downgrade.
Fairfax owns The Age and The Sydney Morning Herald, while in New Zealand it owns two national, nine daily and more than 60 community newspapers.
Mr Morgan is on the boards of both Fairfax Media and Trade Me.
"Trade Me's share price and business performance have been very strong since listing and the company currently trades at a premium to other internet classifieds businesses in the Australian market," Fairfax Media chief executive Greg Hywood told the annual meeting in October.
On the Sydney Morning Herald website, Fairfax executives said any sale would have to be announced on the Australian Stock Exchange first, which would be Monday at the earliest.