Internet: Packer's CPH nabs Brazilian online stake

Sep 19 2008

Mr. Packer has recently appeared to be focusing on casino and gaming plays. But it was revealed yesterday he would pay more than $US11 million ($13.7 million) to take a 5 per cent stake in Brazil Online Holdings, which owns two of Brazil's leading employment websites, Catho Online and Manager Online.
Seek will become Brazil Online's second-largest shareholder by paying $US67.5 million for a 30 per cent stake, in a deal valuing the Brazilian group at $US225 million.
In a statement yesterday, Seek said Mr. Packer's stake was part of a move to "invest alongside" the company. The Packer family has history with Seek, having in 2003 bought a 25 per cent stake in it for $33 million. This has since proved a bargain, given Seek's current $1.5 billion market worth. Mr. Packer remains Seek's chairman, and the Packer-backed Consolidated Media Holdings now owns 27 per cent of the group.
Seek co-founder Andrew Bassat said yesterday the 5 per cent stake had been offered to the Packer family company after the online recruiter originally looked at buying up to 35 per cent of Brazil Online.
"We realized the limits of the debt capacity available to us," he said. "We offered the other 5 per cent to CPH."
Seek has now made two large purchases in 24 hours, following the Wednesday acquisition of 10 per cent of Malaysian-based JobStreet Corporation, which owns top job ad websites in several countries in Southeast Asia.
The JobStreet purchase complemented Seek's other big move in Asia two months ago, when it took control of China's fastest-growing online job ads site, Zhaopin.
After Seek's full-year profit announcement last month, Mr Bassat revealed the company planned two acquisitions. Asked yesterday whether those buys were the Brazil Online and JobStreet stakes, he said: "Absolutely. There will be no more announcements (for the time being)."
He was unconcerned by turmoil in world markets: "To some extent, the current global environment is what's given us the opportunities. These prices would not have been available if the market was more buoyant."
Of the two Brazilian sites, Catho Online has the highest traffic, with 2.7 million unique visitors a month and a 70 per cent brand awareness.
Mr Bassat said the Brazilian market had huge potential, given its 190 million population. With "internet penetration and online advertising" expanding off a low base, Brazilian online classifieds would "enjoy significant growth" in coming years.
He said Seek had a new $200 million loan facility, with $150 million of this having been used following this week's purchases. Despite this, the company's debt levels remained "conservative".
Mr. Bassat said in the short term, the company would "consolidate" its new purchases. "(But) over time, we will continue to grow.

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