Trade Me backs Apax Partners bid

Trade Me looks set to be sold to UK-based private equity firm Apax Partners for $2.56 billion after the firm finalised and increased its offer to match an indicative offer from rival bidder Hellman & Friedman.

Trade Me shareholders will receive $6.45 for each of their shares under the deal, which is subject to shareholder and Court approval. 

This represents a 27 per cent premium to Trade Me’s one-month volume-weighted average price to 20 November 2018, an implied equity value of NZ$2.56b and an enterprise value of NZ$2.74b.

“The Apax Funds have increased their offer price since the indicative proposal, following the completion of their due diligence. After careful consideration, the Board has unanimously concluded that this offer is consistent with our efforts to deliver maximum value for shareholders," chairman David Kirk said in a statement to the NZX. 

“We’re confident Trade Me would have a successful standalone future, but we believe the certainty of the cash offer and material premium would be an attractive outcome and it merits being put to shareholders with our recommendation, in the absence of a superior proposal.” 

Trade Me expects the deal will go to a shareholder vote in April if no higher offer emerges.

If a higher offer was made, Apax would have the right to match it, and Trade Me could be required to pay Apax Funds a $19.2m "break fee" if it went with a different offer.

Apax is a British-based private equity firm that specialises in making long-term investments in technology, services, healthcare and consumer industries. In 2017 it was ranked the fourteenth largest private equity firm in the world.