Trade Me receives $2.5b takeover offer from British company

Long Lunch 21/11/2018
Photo: File.

A multi-billion dollar takeover offer has been made for New Zealand auction site, Trade Me.

Apax Partners made the offer to acquire 100 percent of the company's shares at a cash price of NZ$6.40 per share. The offer would value Trade Me at $2.5 billion.

Trade Me announced on Wednesday it would engage with Apax and provide the company with due diligence access exclusively until December 12 to facilitate a binding offer.

However, Trade Me can engage with third parties if it receives any other unsolicited proposals.

Apax Partners is a British private equity firm, which Newshub Nation presenter Simon Shepherd explained as a group of investors with private funds that buy businesses looking for a short term profit.

Apax has investments in 107 companies ranging from online fashion brands to discount petrol stations to waste management.

The latest report into Trade Me revealed it made $250 million in revenue in the last financial year, up 6.6 percent from the previous year. The company's profit of $97 million was also up by 3.9 percent.

Trade Me said it is being advised by investment banking group Goldman Sachs.

The online-auction site was purchased by Fairfax Holdings in 2006 for $700 million, after being founded by Sam Morgan in 1999. Fairfax later sold its stake in 2012.

Listen to the full interview with Simon Shepherd above.

The Long Lunch with Lynda Hallinan, 12pm - 3pm on RadioLIVE and streaming live to the rova app on Android and iPhone.

RadioLIVE/Newshub.