Trade Me IPO 'twice covered' at top-end of target price range

Update Nov 8: An AFR report says the Trade Me IPO is "twice covered" at $2.70 - the top end of Fairfax Media's target range for the auction site's partial float.

If the listing is over-subscribed at that level, Fairfax Media (which also owns the AFR) stands to net around $356 million (additionally, $166 million in new debt will be applied to Trade Me).

The Australian company is seeking to pay down debt that was reported at $A1.49 billion in its recent annual results.

The timing of the leak seems guaranteed to pique the interest of fund managers, who will today learn if they get a piece of the NZX/ASX dual listing.

Trade Me IPO details leaked
Nov 4: A source close to the Trade Me IPO has told NBR that details of the listing, leaked today to media, are correct.

The confirmed details include that Fairfax is aiming to list Trade Me on the NZX and ASX on December 13, and that Fairfax Media is aiming to raise $310 million to $365 million by floating 135 million shares (a third of the auction site) in a range of $2.30 to $2.70 - indicating a price-to-earnings ratio of 14.1 to 16, against an average of 15 for broadly comparable Australian online businesses.

Retail investors are expected to take around 60% of the shares; a preferential offer to Trade Me's 2.8 members was likely.

A report by Fairfax adviser UBS estimates ebitda of $105.5 million for the current year, an increase of 6.3% on revenue rising 12% to $144 million.

The insider also confirmed that four New Zealand brokers have been appointed to co-lead the IPO: Craigs Investment Partners, First NZ Capital, Forsyth Barr and Goldman Sachs.

Trade Me spokesman Paul Ford said the company was in a quiet period and had no comment on any IPO-related issues.

NBR staff
Tue, 08 Nov 2011

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Trade Me IPO 'twice covered' at top-end of target price range

Float will value Trade Me at $1b - report

Float will value Trade Me at $1b - report