The Best Ebay Near$10 Billion Sale of Classified Ads unit

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Ebay EBAY.O called a board meeting on Friday to select a buyer for its classified ads business in a deal potentially worth up to.10 billion, sources close to the matter told Reuters.

the German headquarters of the online marketplace eBay is pictured at the Europarc dreilinden Business Park south of Berlin in Kleinmachnow, Germany, August 6, 2019. REUTERS / Fabrizio Bensch
The US e-commerce giant will have to decide between two cash offers, submitted by online retailer Prosus and a private equity consortium, and a third cash and stock offer from Norwegian Classifieds Group Adevinta ADEV.OL, the sources said.

Ebay may enter into 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 & Friedman and Pemira, were not immediately available for comment.

Demand for online marketplaces has increased during the coronavirus pandemic as consumers have turned to online shopping due to prolonged blockages and social distancing measures in most countries.

Ebay’s classified business includes brands like Gumtree and Kijiji and offers online ads to more than 1,000 cities around the world.

The unit recorded operating income of 8 83 million in the first quarter of 2020, with revenue of $ 248 million. Its business value is estimated at 8 8 billion to $ 10 billion.

Prosus, which recently did not buy food delivery company Just Eat TKWY.AS, it is expected to play aggressively to gain 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 shares as proposed by fellow Norwegian Adevinta.

Prosus ‘ finance chief told Reuters in June that the Amsterdam-based business, which split from Naspers NPNJn.J last year – has little overlap with eBay unit.

If successful, Prosus would bolster its network of classified businesses that were profitable at an operational level in 2019, while its food delivery companies reported big losses.

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

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


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