Seek takes bigger slice of Zhaopin

Online job search engine Seek Ltd has almost doubled its stake in Chinese employment website Zhaopin Ltd by about 70 per cent as it looks to capitalise in the growing jobs market in China.

Seek will invest $US45 million ($A47.1 million) to lift its shareholding to 42.9 per cent, on a fully diluted basis, from 25 per cent.

"The transaction involves a fresh capital raising and a simultaneous buy-back of early stage venture capital investors," Seek said in a statement.

Seek said it was not looking to take control of the company but rather take advantage of the growing Chinese online employment market.

Seek director of corporate strategy Jason Lenga said the online jobs classifieds market in China is still relatively immature and he anticipates that the strong growth in recent years will continue.

"Zhaopin has significantly improved its competitive position in the past two years," he said.

"This investment combined with an outstanding management team and clear strategy positions Zhaopin well for long term sustained profitability.

"We do not anticipate that Zhaopin will raise any further capital prior to reaching break even, he said.

It expects the investment to be earnings per share dilutive for Seek in fiscal 2009, due to anticipated losses for Zhaopin.

"Seek expects the investment to be strongly earnings per share accretive in the longer term as the Chinese internet employment market continues to increase in scale," it said.

"Seek will continue to account for its interest in Zhaopin as an associate as it will not be exercising control of the company.

Seek said it would fund its increased investment through existing debt facilities.

Macquarie Capital, which is controlled by Macquarie Group Ltd, also has become a shareholder in Zhaopin, holding a 29.1 per cent stake on a fully diluted basis.

Zhaopin chief executive Hao Liu said the investment by Seek and Macquarie Capital will help the business to reach its growth targets in the next few years.

"Seek and Macquarie have a strong history of successfully working together," he said.

"We believe this will help assist us to become an even more formidable player in our marketplace."

Consolidated Media Holdings Ltd (CMH) holds a 27 per cent stake in Seek, which also operates in New Zealand.

Seek also owns Seek Learning, an online training and development business in Australia, New Zealand and the UK.

By 1115 AEST Seek shares were down six cents, or 1.21 per cent, at $4.88 in a broader weaker market.