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Float will value Trade Me at $1b - report

Fairfax Media’s pending Trade Me float will value the auction site at around $1 billion.

The valuation implies around $300 milllion will be raised when Trade Me is listed on the NZX. Fairfax has said it will float up to 35% of the auction site.

The figure was reported by the AFR, which said it was sourced from a pre-market report by UBS – the sole lead manager for the float.

The UBS report is said to value Trade Me at between $966 million and $1.1 billion – excluding $166 million debt (less than a December 2010 Morgan Stanley assessment, which said the auction site was worth between $1.24 billion $1.62 billion).

The Wellington-based auction site was sold to Australia’s Fairfax for $700 million (plus up to $50 million in earn-out bonuses) in 2006.

NZX chief executive Mark Weldon recently told NBR he hoped the listing would take place before the end of the year.

Fairfax recently reported a net full-year loss of $A400 million. The company is seeking to reduce debt of $A1.49 million.

Following the December Morgan Stanley valuation, TradeMe founder Sam Morgan was asked by NBR if he should have held out for more.

As Trade Me’s largest shareholder at the time of the deal, is Mr Morgan now kicking himself that he didn’t hold old for more?

He is not.

“A good deal is one where you leave value on the table for the next guy," Mr Morgan said. (The entrepreneur joined Fairfax's board in March 2010.)

“Trade Me sold in early 2006 - nearly five years ago - so one would hope that it had increased in value. Fairfax has left it alone to flourish and reach its potential, so I'm very happy.” 

More by Chris Keall

Comments and questions

Whats the buy now price ?