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eBay wants to keep stake in classifieds sale, hurting Prosus bid
[NEW YORK] eBay would prefer to keep a stake in the classified advertising business it's selling, according to people familiar with the matter, lessening the chances Prosus will win the hotly-contested auction.
The decision at a board meeting on Friday gives a surprise boost to a bid from Norwegian online marketplace Adevinta, which offered a mix of cash and stock and would leave eBay with a significant stake in the combined business, the people said, asking not to be identified as discussions aren't public. A combination of the classifieds unit with the listed Scandinavian firm would also allow eBay to benefit from any future increase in the shares, they said.
A private equity consortium backed by Blackstone Group, Permira and Hellman & Friedman has separately been pursuing the unit and also offered to let eBay keep a minority stake, the people said.
Until as recently as Friday, Naspers-owned Prosus was considered to be in pole position after submitting the highest, all-cash offer for the entire unit, Bloomberg News reported. eBay's classifieds business could fetch more than US$8 billion in one of the largest auction processes this year, the people said at the time.
Representatives for eBay and Prosus couldn't immediately be reached for comment. Representatives for Adevinta and the private equity firms declined to comment.
eBay and its advisers are still debating the merits of the various offers and bidders could still make a last-ditch effort to tip the scales in their favour, the people said. The seller could make a formal decision on a exclusive partner in the coming days, the people said.
The eBay classifieds portfolio includes online marketplaces separate from the company's eponymous auction platform. Its brands include Kijiji, commonly used in Canada and Italy, and Gumtree, a classifieds site popular in the UK, Australia and South Africa. It also owns Bilbasen, a Danish online vehicle marketplace, and British car search website Motors.co.uk.
eBay is selling the business in response to activist investors that want it to focus on its main online marketplace.
Adevinta was spun off of Scandinavian media conglomerate Schibsted last year with the goal of expanding in the global online classified market. The company's shares surged late last week after "strong" results.