UK buyer raises bid for Trade Me
Trade Me looks set to be sold to Apax Partners for $2.56 billion after the British private-equity firm finalised and upped its offer by about $20 million to match an indicative offer from rival US bidder Hellman & Friedman.
Trade Me shareholders will receive $6.45 for each of their shares under the deal, which remains subject to shareholder, court and Overseas Investment Office approval.
The offer represents about a 25 per cent or $500m premium to Trade Me’s share price before Apax’s interest was disclosed.
Trade Me said its board had unanimously recommended that shareholders accept the offer.
‘‘After careful consideration, the board has unanimously concluded that this offer is consistent with our efforts to deliver maximum value for shareholders,’’ chairman David Kirk said in a statement to the New Zealand stock exchange.
‘‘We’re confident Trade Me would have a successful standalone future, but we believe the certainty of the cash offer and material premium would be an attractive outcome and it merits being put to shareholders with our recommendation, in the absence of a superior proposal,’’ he said.
Trade Me expects the deal will go to a shareholder vote in April, if no higher offer emerges.
If a higher offer was made, Apax would have the right to match it, and Trade Me could be obliged to pay Apax a $19.2m ‘‘break fee’’ if it went with a different offer.
A financial market source said the possibility that Trade Me might receive a materially higher offer from a trade buyer could not be ruled out, and if that happened it might cause a rethink.
But Apax’s offer appeared a good one and Trade Me’s statement indicated it was likely to prevail, he said. Hamilton Hindin Greene investment adviser Grant Davies described Apax’s original offer of $6.40 a share as ‘‘pretty decent’’ – noting it was above analysts’ estimates of Trade Me’s value. So the extra 5c a share may be a little bit of icing on the cake. With Trade Me entering into a scheme of arrangement for the sale of the business to Apax, any higher offer would be in the eleventh hour. An Auckland real estate agent has made a point of brutal honesty to help sell a rundown listing.
The property in West Auckland’s Daytona Rd, advertised by City Sales, is described as a ‘‘group home gone bad’’ and that this ‘‘neglected, rundown ragamuffin needs urgent care’’.
While most agents tend to talk up a property’s selling points, this listing only goes as far as saying parking is one of its few attributes.
When asked why City Sales had taken that approach, marketing manager Scott Dunn said: ‘‘It’s just the God-honest truth. It’s awful. The seller wants to get out and we thought honesty is the best policy.’’
Curiously, this approach is working well for the company.
‘‘This is probably the most popular property we have advertised this year . . . but a lot of people are just keen to look at it because it’s so dreadful and others may just want to knock it down,’’ Dunn said.
‘‘With bigger corporates and franchises, things have to go through a lot of people to get approved. We’re independent. If it shocks people, that’s fine . . . We are trying to get it sold.’’
It was the land that held the value and this property was likely to do well, he said.
‘‘It’s anyone’s guess with an auction at this point but our buyer feedback has started around the $450,000 mark,’’ Dunn said.
Nigel Jeffries, head of Trade Me Property, said: ‘‘This is definitely some creative marketing and we think it’s great the agents are trying something a little different to capture Kiwis’ attention. We haven’t seen a property listing with such a brutally honest description in a while and we think the honesty is brilliant.’’
It’s a tried-and-true method for family-run City Sales.
‘‘We once ran an ad for a rundown property in Remuera with the headline ‘Bring the Bulldozer’ and we had a similar response,’’ Dunn said.