Fairfax to pursue Trade Me IPO

Fairfax Media (ASX:FXJ) has commenced preparations for an IPO of New Zealand online trading and auctions business Trade Me.

Fairfax announced it will sell off between 30% and 35% of the business in the IPO, and put the proceeds partly towards reducing debt. There are no immediate plans to reduce its holding below 65%.

TradeMe will initially list on the New Zealand stock exchange, but the company is also considering an ASX entry.

Fairfax CEO Greg Hywood said the timing is right for an IPO of the business. “[Trade Me] is now of sufficient scale to operate as a standalone, separately listed company,” he said.

The site has around 2.8 million New Zealand members, making it the nation's largest auctions and classifieds business, he said.

Hywood added that the move is consistent with Fairfax's goals of pursuing a more flexible corporate structure.

Timing and pricing of the offer will depend on market conditions. FXJ shares grew 7.1% in Friday's trading to $0.830.