Seek Takes Larger Stake In Chinese Job Site
Sydney Morning Herald
Friday July 11, 2008
SEEK has intensified its push into China, spending $US45 million ($47 million) to boost its stake in the employment site Zhaopin and accelerate growth as its Australian business matures.
The James Packer-backed company teamed with Macquarie Capital to jointly buy out some of Zhaopin's early venture-capital investors and inject more capital into the business. The deal, negotiated over several months and worth a total of $US110 million, will raise Seek's holding in the Chinese site from 30 per cent to 42.9 per cent, with Macquarie taking on a 29.1 per cent stake. The stepped-up investment comes 22 months after Seek bought a quarter of the venture to get a foothold in the rapidly growing economy. Zhaopin, Chinese for "help wanted", has yet to make a profit, but increased its sales by 92 per cent last year."Seek appears to have carved itself an important piece of the market with this investment, given the emerging Chinese online employment classifieds market had previously been forecast to grow to about $US500 million by 2011," said Alex Pollak, an analyst at Macquarie, which owns 5.5 per cent of Seek. Stephen Yan, a spokesman for the bank, declined to comment on the deal.Paul Bassat, one of Seek's two chief executives, said Zhaopin would use the new funds to expand its presence beyond Shanghai and Beijing. While there were no plans to team with Macquarie in other markets, he said Seek was "keen to pursue other opportunities that come along". Seek's shares closed 9c lower yesterday at $4.85.
© 2008 Sydney Morning Herald