On 21 November 2018, Trade Me Group Limited (ASX: TME) made an announcement regarding an indicative proposal which it received from Apax Partners for the acquisition of all the shares of Trade Me at a cash price of NZ$6.40 per share. Following the release of this news, the shares prices of the company uplifted by 16.736 percent as on 21 November 2018.
The indicative proposal is appearing attractive to company’s board which is why they have decided to engage with Apax Partners. And to facilitate a binding offer, Trade Me has provided due diligence access to Apax Partners which is subject to a “fiduciary carve out” that permits Trade Me to engage with third parties.
At this point in time, there is no guarantee that the indicative proposal will result in an offer. The Board of Trade Me has informed its shareholders that they are not required to take any action regarding the indicative proposal. If any material development happens with regard to the proposal, the board will update the market about it.
In FY 2018, the company performance was strong wherein revenue grew by 6.6 percent to NZ$250.4 million as compared to the previous year. The net operating profit of the company increased by 3.9% to NZ$96.6 million in FY 2018. The Net profit attributable to security holder increased by 2.3% to NZ$96.5 million in FY 2018. The total expense growth in FY 2018 was 7.1 percent year-on-year, up slightly on 5.7 percent growth in F17, but well done on FY16 and FY15. The Earnings per share (EPS) of the company increased from 23.76 cents in FY 2017 to 24.33 cents in FY 2018. Trade Me’s largest business, Trade Me Motors, was the star performer in FY 2018 as it reported a revenue increase of 12.7 percent as compared to last year. The Board declared a fully imputed Final dividend of 10.50 cents per share which was paid on 20 September 2018. In addition, the board declared a special dividend of 22.0 cents per share which was also paid in September.
For FY 2019 the company is expecting the total revenue to grow in between 5 - 8% over F18. The company is also expecting the operating profit after tax to grow at a similar rate in percentage term.
In the last six months, the share price of the company increased by 10.80 percent as on 20 November 2018. TME’s shares traded at $5.580 with a market capitalization of circa $1.9 billion as on 21 November 2018 (AEST 1:43 PM).
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