Investment bankers pitching for Trade Me roles

Trade Me, founded in 1999, is New Zealand’s largest auction website.

Investment banking activity is heating up around New Zealand’s largest online auction and classifieds website Trade Me, as its private equity owner gets set to place the business up for sale.

DataRoom reported in November that owner Apax Partners was keen to exit the business that it purchased for $2.4bn in 2018.

It is understood investment bankers are yet to be appointed, but plenty are pitching hard to the company to win a role. In turn, they are scanning the market for prospective buyers to represent.

The understanding is that those capable of buying the business fall into the category of large global private equity groups, which may be names like Kohlberg Kravis Roberts, TPG Capital and Blackstone. Late last year, the talk was that a float was also on the agenda in what could be a dual track sale process where Apax weighs up an initial public offering against a trade sale.

The sales pitch is that the group has absorbed price hikes in a market downturn, so the prospect of investor upside when market across the Tasman improves being highly likely.

Trade Me is New Zealand’s largest auction website, founded in 1999 by entrepreneur Sam Morgan, who sold the operation in 2006 for $NZ700m ($637m) to Fairfax Media. It was publicly listed by Fairfax as a separate entity in 2011. The website generates strong earnings from car sales and makes robust income from real estate and job ads.

Domain Group

After CoStar sweetened its offer to buy Domain Group to $4.43 per share ($2.8bn in total) plus 4c of franking credits, curiously, shares closed down almost 5 per cent on the news to $4.25.

CoStar had earlier offered $4.20 per share and the stock on Wednesday closed at $4.47.

Domain, which is 60 per cent owned by Nine Entertainment, granted due diligence after Nine and CoStar were negotiating earlier behind the scenes. The market chatter is that Domain and Nine will wave the deal through.