Market picking Trade Me sale

FAIRFAX MEDIA is reportedly selling its remaining stake in Trade Me for around A$ 650 million (NZ$810m).

If the sale were to proceed, it would considerably pay down the company’s debts.

The stake is being sold to a range of New Zealand and Australian institutions in a placement through global financial services company UBS, according to market sources.

The quoted sale figure would exceed what Fairfax paid for Trade Me in its initial investment five years ago.

Fairfax, the owner of the Sunday Star- Times, bought the popular online auction company from founder Sam Morgan and his fellow private investors for $700m in 2006.

Morgan went on to be made a board member at Fairfax.

It previously recouped $364m by selling a 34 per cent stake through Trade Me’s initial public offering in December 2011.

In June, Fairfax further sold down its holding by 15 per cent at a discounted price of $2.70 a share, netting just over $200m and retaining 51 per cent of the company.

The sale is surprising because the site is regarded as the best asset in the digital arm of Fairfax, said Lance Wiggs, a former Trade Me insider who worked on the initial sale to Fairfax.

‘‘It does make sense for investors that you want to separate your assets, one old media, one new media. If I was Fairfax I would want to own Trade Me, not old media,’’ Wiggs said.

‘‘I would characterise it as unexpected, but surprising to all of it.’’

Fairfax executives were unable to comment on the reported sale, saying the company would have to make an announcement on the Australian Stock Exchange first, a move that would come tomorrow at the earliest. not sell