On 5 December 2018, Trade Me Group Limited (ASX: TME) announced that it has received a proposal from Hellman & Friedman to acquire all the shares in Trade Me Group at a cash price of NZ$6.45 per share. Following the release of this news, the share price of Trade Me uplifted by 3.333 percent as on 5 December 2018.
Prior to this Proposal, Trade Me Group had received an offer from Apax Partners to buy all the shares of Trade Me at a price of NZ $6.40 per share. Trade Me Group has informed Apax Partners about the proposal from Hellman & Friedman and Apax Partners.
The Board of the Trade Me Group has decided that they will engage with Hellman & Friedman on the new proposal. However, as of now, it is not certain if either of the proposals will result in an offer, or any other transaction, for Trade Me. The Board has also informed the shareholders that they are not required to take any action in relation to either proposal and that they should not do so without assessing all available information and seeking professional advice.
In FY 2018, the financial performance of Trade Me Group was strong as the company’s revenue grew by just under 7 percent year-on-year, and net operating profit by 4% over the same period. Further, the Board declared a special dividend of 22.0c per share in September2018.
Trade Me Motors performed well in FY 2018 with revenue increasing by 12.7% as compared to prior year. Trade Me Jobs performance was also very strong with revenues increasing by 14.1 percent year-on-year, driven by a 34.3 percent increase in the sale of depth products. Trade Me Property reported a revenue increase of 10.2 percent year-on-year. Revenue from depth products for ‘for sale’ real estate agent customers was up by 38.2 percent as compared to last year.
In June 2018, the company released its new payment system, Ping, which allows all members to take instant payments and to spend with Ping onsite and further it also removes the need to wait for bank payments to clear and speeds up sales. The company is also experimenting with Artificial Intelligence (AI) to make the listing process more efficient. The company has also developed an Android app called Pinhole which provides suggestion to the members using its Artificial Intelligence.
In FY 2019, Trade Me is expecting its total revenue to increase by 5% to 8% over FY18 and the company also expect its operating profit after tax to increase at a similar rate.
In the last six months, the share price of the company increased by 30.96 percent as on 4 December 2018. TME’s shares traded at $5.890 with a market capitalization of circa $2.26 billion as on 5 December 2018 (AEST 1:35 PM).