Packer lifts stake in US property site
The billionaire's share of the Nasdaq-listed Zillow now stands at 9.3 per cent, up from 4.7 per cent. He raised $261 million last month by selling holdings in the online employment site and boutique funds group.
Cavalane Holdings bought about 3 million shares on behalf of Mr Packer's Consolidated Press International Holdings, the Seattle-based Zillow said in a filing in the US, without giving financial terms.
The stake is valued at $298 million based on Zillow's last closing price.
Cavalane, an investment vehicle controlled by Mr Packer, is Zillow's largest shareholder after the Australian funds management firm Caledonia Private Investments, which has a 16 per cent holding.
Caledonia, a boutique fund with more than $3 billion under management, has a history of using its clout in corporate transactions.
According to its website, Zillow runs the largest real estate advertising network in the US, in partnership with Yahoo!, real estate search engine Yahoo!Homes.
As well as its real estate database, Zillow offers mortgage and financial advice from in-house economists and specialists.
Mr Packer's purchase of a larger stake in Zillow comes amid a recovery in the US housing market. Zillow shares rose almost 3 per cent to $US99.09 on Tuesday.
The Crown chairman's decision to sell holdings in Seek and Magellan last month was expected to raise funds to pay down debt and make other investments.
His Seek holding represented a residual stake of 4 per cent of the company. Seek was founded by the Bassat brothers in 1997, and Mr Packer bought in in 2003. Investing $33 million for a 25 per cent stake, Mr Packer sold most of his stake six years later, making a profit of more than $440 million.
At its annual recent results, Seek said it was reaping the benefits of diversifying into education and international markets, after more than doubling profit in the face of a sluggish domestic jobs market.
Mr Packer has built a reputation for being able to pick successful internet businesses. As well as the money raised from Seek, he also turned a $100 million investment in online car advertising site carsales.com into $462 million, and a $20 million investment in PC Tools into a $60 million investment.
Frequently Asked Questions about this Article…
Billionaire James Packer has increased his stake in Nasdaq-listed Zillow. His holding rose to 9.3% from 4.7% after the recent purchase.
Cavalane Holdings bought about 3 million Zillow shares on behalf of Mr Packer's Consolidated Press International Holdings, according to a Zillow filing.
Based on Zillow's last closing price reported in the article, Packer's stake is valued at about US$298 million.
Packer raised around $261 million last month by selling holdings in the online jobs site Seek and the boutique funds group Magellan, which helped fund the larger Zillow stake.
Cavalane (Packer's vehicle) became Zillow's largest shareholder after the purchase, but Caledonia Private Investments remains the biggest with a 16% holding. The article notes Caledonia is a boutique fund with more than $3 billion under management.
According to the article, Zillow runs the largest real estate advertising network in the US (in partnership with Yahoo! Homes), maintains a real estate database and offers mortgage and financial advice from in‑house economists and specialists — services relevant to investors tracking the housing and online advertising markets.
Yes — the article reports Zillow shares rose almost 3% to US$99.09 on Tuesday. The purchase comes amid a recovery in the US housing market, which is relevant context for investors.
The article highlights Packer's successful internet investments: his Seek investment (bought in 2003 for $33 million for a 25% stake) eventually produced more than $440 million in profit; a $100 million investment in carsales.com grew to $462 million; and a $20 million investment in PC Tools turned into $60 million.
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