You are here: Home » Reuters » News
Business Standard

NZ's Trade Me gets second, higher buyout offer for $1.8 billion

Reuters  |  WELLINGTON 

By Charlotte Greenfield

(Reuters) - New Zealand's top Group said it has received a NZ$2.56 billion ($1.8 billion) buyout proposal from a U.S. private-equity firm, trumping a rival offer and setting the stage for a possible bidding war.

The offer adds to a flurry of deals made this year in and - attractive for private-equity firms given their stable and advanced economies that offer a steady cash flow amid a global financial market rout.

California-based offered NZ$6.45 per share for Trade Me, or NZ$0.05 higher than an offer London-based group made last month.

Shares of Trade Me, similar to auction website eBay Inc, rose 3 percent on the to a record of NZ$6.25 on Wednesday, just short of the indicative offer price, as investors allowed for uncertainty that a sale would go through.

"It validates our thesis that the company was being undervalued given its very low gearing and its cash generative nature," said Mark Brown, chief officer at Auckland-based fund that owns shares in

"It has a dominant position within the NZ market. You can buy a in a smaller market, but it's clearly more difficult to buy a in a global or much bigger market," Brown added.

Launched in 1999 with 15 staff, now has more than 600 employees and says it has the most customers among online classified in

The website offers auctions and fixed-priced sales for cars, and other household items. It also has jobs and online dating services.

Trade Me said it would open its books for the U.S. bidder to conduct due diligence, as it has done for the U.K. bidder Apax. Apax was not immediately available for comment.

"These kind of distribution companies like Trade Me don't require a lot of capital and don't require (much) working capital so they're very attractive ... for firms," said Brian Gaynor, of Auckland-based Milford Asset, which holds Trade Me shares.

Among other deals by private-equity firms in and this year, Canadian landlord made a $2.4 billion offer for Investa Office Fund, beating giant

Restaurant Brands New Zealand Ltd, operator of and franchises, said in October it was in takeover talks with Mexico-based that made a $578 million bid for a controlling stake.

($1 = 1.4436 New Zealand dollars)

(Reporting by in and Devika Syamnath in BENGALURU; Editing by and Himani Sarkar)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, December 05 2018. 12:22 IST