Trade Me May Enter Australia

Trade Me is looking into the Australian market and plans to compete head-on with eBay Australia. Trade Me is a classified ads and online auctions company that is being sold by Fairfax Media.

David Kirk, chairman of Trade Me, said that while the company’s main focus is New Zealand, its short- and medium-term plans might include Australia. His comments coincided with Fairfax’s confirmation that it is selling its 51-percent Trade Me Stake to some institutional investors with $3.05 per share.

Kirk, as Fairfax chief seven years ago, led the acquisition of Trade Me. He is a non-executive chairman of the online auctions and advertising company.

If Fairfax is successful in selling Trade Me, this will bring in some $616 million to Fairfax coffers. When Fairfax bought Trade Me in 2006, it paid some NZ$700 million or about $557 million.

Greg Hywood, chief executive of Fairfax Media, said the earnings from the sale would help the balance sheet of Fairfax. It would also give the company financial flexibility that would allow it to invest and complete Fairfax’s structural transformation.

Hywood also said this is an opportunity for the company to reduce its debt and enjoy greater financial flexibility.