Fairfax has completed the sale of its 51 per cent stake in
Trade Me, the online shopping site confirmed this evening.
Fairfax's move means it has no further business connection
with Trade Me.
The company executed an underwriting agreement for the sale
of 202.0 million Trade Me shares for A$616 million, with
proceeds from the sale to be used to reduce Fairfax's net
Fairfax bought Trade Me for NZ$750 million in 2006.
Trade Me chairman David Kirk said the sold shares had been
placed with a broad range of institutions and demand had been
"The response shows Trade Me is well-regarded by the market
and that investors are confident about the company's
performance," he said. "The sell-down means there is a
significant increase in the free float and liquidity of Trade
Me shares, and ultimately that makes the company more
Trade Me chief executive Jon Macdonald said that "at an
operational level it's business as usual for Trade Me" and
that the sell-down would have no material impact on revenue
Fairfax-nominated director Greg Hywood has resigned from
Trade Me's board to concentrate on his Fairfax duties.
Gail Hambly and Sam Morgan, the other Fairfax nominated
directors, offered to resign from the board, but have agreed
to stay after the existing independent directors asked them
to remain on the board.
Shares in Trade Me have been on hold for most of today, but
are expected to resume trading tomorrow.
Earlier today, funds management sources said Fairfax's 51 per
cent stake in Trade Me was likely to end up with mostly
"There is some concern in the market this morning that a very
high proportion of this stock may go overseas," said one fund
Fund managers said the stake was unlikely to end up with a
single major player in the online shopping space.
"I'm sure that this (stake) would have been shopped around
among potential 'trade' buyers and it is interesting that no
one has really put up their hands," he said.
"If there were other trade buyers, one would have thought
that this would have been an opportunity," he said.
"But who knows what might happen a year or two down the
track," he said.
Fund managers, still smarting from the high level of foreign
ownership involved in the recent Fonterra offer, said there
was concern that the bulk of the stake would go overseas.