Following a report in the Wall Street Journal that TPG and Blackstone Group, Naspers and Axel Springer have all expressed an interest in the eBay Classifieds Group, eBay have put out a statement regarding a possible sale. The Journal also reports eBay are reaching out to other potential buyers and expressions of interest are expected by March.
“eBay has been exploring potential value-creating alternatives for Classifieds and continues to be in active discussions with multiple parties regarding a potential transaction. As previously noted, eBay expects to provide an update regarding this process by the middle of the year. eBay remains committed to maximizing the value of Classifieds for eBay shareholders.”
– eBay Statement
Rumours that the eBay Classifieds Group could be worth anything up to $10.0 billion would make it worth double what StubHub sold for and the likelihood is that eBay would plough any cash raised (after taxes) into further stock buy backs. eBay have already bought back $5.0 billion in share buybacks and recently announced expansion of 2020 share buyback plan from $1.5 billion to $4.5 billion, the extra $3.0 billion coming from the sale of StubHub.
“eBay’s Board and management are committed to driving significant returns to shareholders by maximizing the value of Classifieds and positioning our Marketplace business for long-term success. The Classifieds review process, together with the StubHub sale and our initiatives to increase volume, revenues, margins, and cash flow while continuing to invest in long-term profitable growth, demonstrate this commitment. We are acting with urgency while focusing on the ultimate objective of maximizing the value of Classifieds.”
– Scott Schenkel, interim CEO, eBay
If eBay do sell the eBay Classifieds Group, this would leave eBay Inc with just the eBay marketplace and all excuses for not executing would be gone. Under John Donahoe, PayPal’s performance kept investors happy until activist investors came long and forced the sale of PayPal. Then under Devin Wenig the multi-year turnaround plan failed to drive revenue growth and more activist investors forced the sale of StubHub and want the sale of eBay Classifieds.
The only question that remains is if selling off the family jewels will satisfy investors and if either Scott Schenkel or a replacement CEO can revitalise the marketplace, or if eBay will now be bite sized enough that an investor will snap up the marketplace place signalling the end of eBay Inc with eBay becoming a division of another company. Already there was a fleeting rumour that the owners of the New York Stock exchange could have been interested, but rumours were rapidly squashed. But once one potential offer comes along it tends to spark interest and further offers come out of the woodwork.
Taking eBay private would give the ability for new owners to effectively press a reset button, remove the quarterly pressure to generate half a billion or so profits, and allow a grace period where everything from technology to fees could be reconsidered to revitalise the marketplace.
“…there was a fleeting rumour that the owners of the New York Stock exchange could have been interested, but rumours were rapidly squashed.”
ICE approaching eBay was perhaps briefly considered a ‘rumor’ (a source on background), but it was quickly validated and confirmed.
You cannot look at these “sources familiar with” articles planted by bankers in the WSJ as fact. The fact of this story is more to flush out other potential buyers, and force them to get engaged, as eBay has said this won’t be updated until mid-year, which means July (at 2Q results).
I think Facebook would be best placed to snap it up, and they could snap up RMG also in the UK anyway for logistics as there value has totally plunged but I expect there be uproar,
I expect there would be a lot of courier options on other countries. Logistics is key it is what Amazon got so right.
With Facebook’s money much of this would be spare change.
This is how TUI came into being. The preussag group in Germany did it by buying up the biggest or 2nd biggest tour operation in every country in the EU, now 20 years later they are the only players in town.
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