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EBay Korea delays final bidding round Potential buyers complain of insufficient information about company

Translated by Ryu Ho-joung 공개 2021-05-07 08:10:13

이 기사는 2021년 05월 07일 08:03 더벨 유료페이지에 표출된 기사입니다.

The final round of bidding for eBay’s Korea business has been delayed by two weeks to the end of this month as potential buyers of the ecommerce platform asked for more time to conduct due diligence, industry sources said.

Lotte, Shinsegae, SK Telecom and MBK Partners, which have been conducting due diligence for the past few weeks, have complained of the US ecommerce company not being cooperative in providing information on its South Korean unit, and that was the reason for the delay, according to sources.

EBay Korea recorded revenue of 1.3 trillion won ($1.15 billion) and operating income of 85 billion won in 2020, both up compared to a year earlier. However, its first-quarter results have not been disclosed to the bidders yet, although they believe that the unit’s performance was lackluster in the three months through March.

With a delay in disclosing financial results, doubts are growing among the bidders about the value of the business, industry watchers said. The U.S. ecommerce giant reportedly expects its South Korean unit to fetch 5 trillion won.

Lotte’s interest in eBay Korea is said to have been sharply reduced as the retail conglomerate shifted its strategy to focus on revamping its ecommerce platform, Lotte On, rather than betting billions of dollars on uncertainty of an acquisition’s effects. Lotte On recently appointed Na Young-ho, former head of strategic business at eBay Korea, as its new chief executive.

Shinsegae has teamed up with internet giant Naver and private equity firm Affinity Equity Partners, which has a minority stake in the conglomerate’s ecommerce unit SSG.com, to prepare a bid for eBay Korea. But industry watchers say its biggest reason for being in the race is likely due to counter Lotte On’s expansion. SSG.com has a mere 2% share in the ecommerce market by gross merchandise value versus Lotte On with a 4% share.

SK Telecom and MBK Partners had been in talks to jointly bid for eBay Korea but they failed to reach an agreement. SK Telecom is looking to grow its ecommerce platform 11st, while MBK Partners is hoping to create synergies between eBay Korea and its portfolio company Homeplus.

The bidders reportedly believe the price tag is too expensive. But eBay Korea’s deep experience in ecommerce and immense database of customer data could attract them, industry watchers said. eBay Korea has also been in the black for 16 straight years unlike its loss-making rivals.

EBay Korea has a solid market position. It is the third largest player in the country’s ecommerce market with a 12.4% share, after Naver with 18.6% and Coupang with 13.7%. The company earned gross merchandise value of 20 trillion won in 2020.

But its growth has been slowing recently, with the business posting a 12% increase in revenue last year. This compared with Coupang, Naver and SSG.com, which saw more than 30% revenue growth in 2020 amid the pandemic-driven online sales boom.

Morgan Stanley and Goldman Sachs are managing the sale process. (Reporting by Si-eun Park)
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