Fairfax sells Trade Me to cover debts
Australian media giant Fairfax Media is selling its remaining 51 percent stake in Trade Me.
The sale, for just more than $800 million, will allow Fairfax to pay off its debts.
There has been a weekend sale at Trade Me, and it is not just the t-shirts but the website itself.
It's a decision that surprised Lance Wiggs, who advised Trade Me's founders when they were first approached by Fairfax six years ago.
“What's astonishing to me is that they are selling all of it,” says Mr Wiggs. “So how can you take what really is the best element of Fairfax? It's the one that makes the most money. It's the one that is the future, and it's the one that needs the least transformation.”
But Fairfax wants to pay off its debts. The sale of the 51 percent stake is more than it paid for the whole company in 2006.
Fund mangers 3 News spoke to say they were approached yesterday afternoon by the investment bank UBS. The interest was so strong both here and in Australia that by last night it was a done deal. The Australian institutions are so keen on Trade Me it looks like they will buy around 90 percent of the shares being sold by Fairfax.
No investor will have a controlling stake, meaning it should be business as usual for Trade Me and its users, at least for now.
“The biggest lever they have got is pricing,” says Mr Wiggs. “So the one concern is if they think of themselves as a money-making machine rather than as a great company that delivers incredible experiences.”
Fairfax has not abandoned the internet. Its focus will be on transforming itself from a traditional media company into a digital one.