ADEVINTA BUYS EBAY’S CLASSIFIED ADS UNIT FOR $9-B
Norway’s Adevinta has won the auction to buy the bulk of eBay’s classified ads unit for nearly $9 billion, with the US e-commerce firm planning to keep a minority stake, two sources familiar with the matter told Reuters on Monday (Tuesday, July 21, 2020 in Manila).
Ebay’s classified business includes brands such as Gumtree and Kijiji, and offers online ads to more than 1,000 cities around the world. The unit posted operating income of $83 million and revenue of $248 million in the first quarter of 2020, Greg Roumeliotis and Pamela Barbaglia reported.
Activist investors Elliott Management Corp and Starboard Value had been pushing eBay to sell the unit and its ticket sales business since last January as part of a plan that could double the company’s value. An initial meeting of the eBay board on Friday was inconclusive, one of the sources said. However at a second, three-hour meeting on Saturday, the board made a u-turn and decided to keep a stake in the business to retain customers and prevent competition between its classified and marketplace businesses, the source added.
EBay will get a near 2 billion euro ($2.3 billion) tax benefit by keeping an interest in the business and rolling over its equity - a key change in strategy, the source said. Last week, Reuters reported the US e-commerce giant had received offers for the classified ads unit from online retailer Prosus, a private equity consortium, and Adevinta.