Trade Me’s share price has risen again to hit a new high of $6.38. This comes as the bidding war over the company heats up.

Trade Me is New Zealand’s most popular online trading platform. It has a market capitalisation of $2.41 billion, and right now, it’s caught between two international buyers.


Why the increase?

On November 21, Trade Me received a $2.5 billion takeover offer from British private equity firm Apax Partners. This caused Trade Me shares to surge by over 17%.

On November 29, rumours emerged that American equity firm Hellman & Friedman was considering making an offer. Trade Me’s share value spiked by over 2%.

On December 5, the offer by Hellman & Friedman was officially announced. Trade Me’s price spiked once more by over 2%.

This brings us to today’s development — Apax has matched H&F’s higher bid of $6.45 a share to a total of $2.56 billion.


What’s next for the [NZX:TME] share price?

The price could see another increase if H&F come back with another offer. However, Trade Me will owe Apax a $19.1 million break fee if they accept a different bid.

This means whatever H&F hits back with would likely have to be about $20 million higher than what Apax is offering.

As the tension builds, we anticipate an upward trajectory for Trade Me stocks, given the positive sentiments shown by investors so far.


Taylor Kee,
Editor, Money Morning New Zealand