eBay Said to Near $10 Billion Sale of Classified Ads Unit

Demand for online market places has surged during the coronavirus pandemic.

eBay Said to Near $10 Billion Sale of Classified Ads Unit

eBay is likely to prefer a cash sale to Prosus

Highlights
  • eBay will need to decide between two all-cash bids
  • Demand for online market places has surged during coronavirus
  • The unit posted an operating income of $83 million in Q1 2020
Advertisement

eBay has called a board meeting on Friday to select a buyer for its classified ads business in a deal potentially worth up to $10 billion (roughly Rs. 75,233 crores), sources close to the matter told Reuters. The US e-commerce giant will need to decide between two all-cash bids - submitted by online retailer Prosus and a private equity consortium - and a third cash-and-share offer from Norwegian classifieds group Adevinta, the sources said. eBay may enter exclusive talks with one of the three parties as soon as next week, they said.

Prosus and Adevinta declined to comment.

eBay and the private equity consortium - which consists of Blackstone, Hellman and Friedman, and Pemira - weren't immediately available to comment.

Demand for online market places has surged during the coronavirus pandemic as consumers have turned to online shopping due to prolonged lockdowns and social distancing measures in place in most countries.

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 an operating income of $83 million (roughly Rs. 624 crores) in the first quarter of 2020, with revenues of $248 million (roughly Rs. 1,865 crores). Its enterprise value is estimated at $8 billion (roughly Rs. 60,187 crores) to $10 billion (roughly Rs. 75,233 crores).

Prosus, which recently failed to buy food delivery firm Just Eat, is expected to play aggressively to win control of eBay's classified ads business, the sources said.

They added that eBay is likely to prefer a cash sale to Prosus to a deal involving stock as proposed by Norwegian peer Adevinta.

Prosus's finance head told Reuters in June that the Amsterdam-based business - which was spun out of Naspers last year - has little overlap with the eBay unit.

If successful, Prosus would reinforce its network of classified businesses which were profitable at an operating level in 2019, while its food delivery companies reported heavy losses.

For Adevinta the deal would instead be a transformational move allowing it to roughly double its size and offering eBay a stake in the combined entity, the sources said.

The private equity consortium has a track record of investments in the classified industry as Hellman & Friedman and Permira are currently backing Germany's AutoScout24 and Poland's Allegro, respectively.

© Thomson Reuters 2020


Why are smartphone prices rising in India? We discussed this on Orbital, our weekly technology podcast, which you can subscribe to via Apple Podcasts, Google Podcasts, or RSS, download the episode, or just hit the play button below.

Affiliate links may be automatically generated - see our ethics statement for details.
Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.

Netflix Adds More Than 10 Million New Subscribers, Names Ted Sarandos Co-CEO
Twitter Stepped Up Search to Fill Top Security Job Ahead of Hack
Share on Facebook Gadgets360 Twitter Share Tweet Snapchat Share Reddit Comment google-newsGoogle News
 
 

Advertisement

Follow Us

Advertisement

© Copyright Red Pixels Ventures Limited 2024. All rights reserved.
Trending Products »
Latest Tech News »