The SEEK.com team are saving their main celebration for a big dinner in Melbourne later this week, but the various major shareholders should have enjoyed a few glasses of bubbly last night after the online advertising company powered ahead to finish its first day’s trade at a 20c premium of $2.30.
But one major shareholder who won’t be at the dinner is Yahoo, which defected from SEEK to sign a distribution deal with Fairfax’s rival Mycareer.com website last year. Yahoo was smart enough to not sell its 5.4% stake into the listing, but is instead waiting for the buoyant after-market and is expected to emulate its strategy with Google which it exited slowly over a couple of years.
The prospectus didn’t disclose Yahoo’s defection, but it did note the following on page 25: “SEEK believes that Yahoo is likely to be a short term holder of its shares”.
Hmmm, relations obviously aren’t too flash and it sounds like the SEEK boys won’t be at all unhappy when Yahoo have tipped out all of their 14.5 million shares. The Fairfax document attacking the SEEK prospectus which we revealed last week included the following line about Yahoo: “SEEK highlights their key distribution deals yet again omit mention of an inconvenient fact: that they recently lost distribution partnership with Yahoo! (one of the world’s largest portals) to MyCareer.”
Our SEEK prospectus only arrived yesterday so we”ve crunched all the numbers on how the major players fared based on the closing price on the first day of trade:
- PBL: invested a further $8.4m to lift spend to $43.4m on 69.9m shares which were yesterday worth $161m. Paper profit $128m.
- Andrew and Paul Bassat: each co-founding brother collected $15m from the float and retained $33.7m worth of stock for a total value of $49m or $98m combined.
- Matthew Rockman: third co-founder collected $22m from float and retained $26m worth of stock for total collect worth $48m.
- Irvin Rockman: retired as non-executive chairman and collected $21.63m from float and retained $34.5m stake for $56m pay day. Father and son totalled $104m.
- Yahoo: retained $33m stake but likely seller yesterday.
- Bob Watson: remains a director but associated entities collected $10.3m from float and retained $18m for $28.3m total.
- Liberman Family: retained $27m stake but may have been selling yesterday.
- Macquarie Technology Fund: sold entire stake into float for $24m, giving lead manager Macquarie Bank a big incentive to maximise the selling price.
All up, you can only congratulate SEEK. The float was well structured with the Packer family’s buying providing a vote of confidence whilst the founders all left themselves with plenty of skin in the game that can’t be sold before the 2005-06 results are released. Given the prospectus is rather bullishly forecasting $90 million in revenue and $40 million in profit for 2005-06, it is appropriate that no-one sells any more shares before we see if they can deliver.
Finally, we can’t think of another newly listed company that voluntarily released annual reports to the ASX from its earlier years as a private company. The deluge of SEEK announcements yesterday included the 2002, 2003 and 2004 annual reports. Such disclosure is to be commended. Check them all out here.