FAIRFAX'S 51 per cent stake in Trade Me looks likely to end up with mostly foreign institutions, funds management sources said this morning.
Investment bank UBS is underwriting the stake and is undertaking a "book build" bidding process for the stock. It is understood the process has almost finished.
"There is some concern in the market this morning that a very high proportion of this stock may go overseas," said one fund manager.
Fund managers said the stake was unlikely to end up with a single major player in the online shopping space.
"I'm sure that this (stake) would have been shopped around among potential `trade' buyers and it is interesting that no one has really put up their hands," he said.
"If there were other trade buyers, one would have thought that this would have been an opportunity," he said.
"But who knows what might happen a year or two down the track," he said.
Fund managers, still smarting from the high level of foreign ownership involved in the recent Fonterra offer, said there was concern that the bulk of the stake would go overseas.
Market talk was that Australian institutions had dominated the placement.
Fairfax's moves means the company will exit Trade Me completely.
The company said it had executed an underwriting agreement for the sale of 202.0 million Trade Me shares for A$616 million.
Fairfax bought Trade Me for NZ$750 million in 2006. Proceeds from the sale will reduce Fairfax's net debt, the company said.
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