thebell

전체기사

Potential buyers of eBay Korea suggest share-swap rather than all cash Bidders are skeptical about unit’s market position and want to share risk with seller

Translated by Ryu Ho-joung 공개 2021-05-14 08:27:36

이 기사는 2021년 05월 14일 06:44 더벨 유료페이지에 표출된 기사입니다.

The uncertainty surrounding the eBay Korea sale is mounting as potential buyers interested in the US ecommerce giant’s South Korean unit consider options to reduce the risk of overpaying on doubts over the company’s growth prospects.

Ebay Korea earlier this month decided to delay the final round of bidding by two weeks to the end of May in response to requests from the shortlisted bidders for more time to conduct due diligence.

However, the bigger reason for the delay was the wide gap in views of the business’s value, sources said. The shortlisted bidders – including strategic investors such as retail conglomerates Shinsegae and Lotte and the major telco SK Telecom – estimated eBay Korea to be worth about 3 trillion won ($2.6 billion), much lower than a 6 trillion won valuation sought by the unit’s parent company.

The low valuation by the bidders reflects their doubts over eBay Korea’s ability to compete with rivals, industry watchers said. The company, which operates Gmarket and Auction, is the only profitable player in the country’s ecommerce market, with its gross merchandise value reportedly amounting to 20 trillion won, almost equivalent to those of Coupang and Naver.

However, there are also concerns about the company's weak market position relative to larger rivals, with the number of businesses that sell through its marketplace starting to decrease.

To avoid the risk of overpaying, some of the bidders have reportedly proposed a share-swap deal, in which eBay Korea is merged with a potential buyer’s ecommerce unit – such as SSG.com, Lotte On and 11st – and then shares in the combined entity are held by eBay and the selected buyer in accordance with an agreed proportion.

In this scenario, the largest shareholder of the combined entity will be the selected buyer, and eBay will also retain a significant minority stake, which can be sold in the new unit’s possible initial public offering. Potential buyers that suggested this deal structure reportedly have an IPO in the US in mind, encouraged by Coupang's successful debut on the New York Stock Exchange in March.

Last month, Kakao acquired Zigzag through a share-swap deal that valued the online fashion platform at 1 trillion won. The new combined entity, which will be launched after the merge of Kakao’s fashion commerce unit and Zigzag, will become a subsidiary of Kakao.

However, it is uncertain whether eBay will accept such offer, in particular as the US ecommerce group, which is often targeted by activist hedge funds, has its own reason to offload its Korean unit at a high price.

“Potential buyers worried about (eBay Korea’s) growth prospects are taking a cautious approach to price negotiations,” said an industry insider. “A share-swap deal could be an alternative but it’s uncertain whether eBay will accept this.” (Reporting by Eun-jin Choi)
< 저작권자 ⓒ 자본시장 미디어 'thebell', 무단 전재 및 재배포 금지 >

더벨 서비스 문의

02-724-4102

유료 서비스 안내
주)더벨 주소서울특별시 중구 무교로 6 (을지로 1가) 금세기빌딩 5층대표/발행인성화용 편집인이진우 등록번호서울아00483
등록년월일2007.12.27 / 제호 : 더벨(thebell) 발행년월일2007.12.30청소년보호관리책임자김용관
문의TEL : 02-724-4100 / FAX : 02-724-4109서비스 문의 및 PC 초기화TEL : 02-724-4102기술 및 장애문의TEL : 02-724-4159

더벨의 모든 기사(콘텐트)는 저작권법의 보호를 받으며, 무단 전재 및 복사와 배포 등을 금지합니다.

copyright ⓒ thebell all rights reserved.