Ebay close to reaching deal which could force it to sell off its marketplace business

Ben StevensCompanies

Ebay is understood to be close to reaching a deal with activist investors which could see it be forced to sell off its marketplace, classified and ticketing arms.

The online marketplace is expected to announce a settlement with activist investment firms Elliot Management and Starboard later this week, which will see it undergo a full strategic review.

According to sources close to the matter, the strategic review is likely to see it be forces to sell off its classified business Gumtree which it acquired in 2005, alongside its ticket selling platform StubHub, which it purchased for $310 million (£238 million) in 2007, in order to focus on its core operations.

Furthermore, the settlement could see it offload its core marketplace business while adding numerous new members from both the investment companies to its board.

READ MORE: Ebay could be forced to sell off Gumtree & StubHub by investors

Its core marketplace business is understood to be worth $15 billion (£11.25 billion), while Gumtree and StubHub are estimated to be worth around $10 billion (£7.5 billion) and $4 billion (£3 billion) respectively.

This follows news in January that Elliot Management, the activist hedge fund worth £26 billion which bought Waterstones and Perfect Home last year, acquired a four per cent stake in Ebay for $1.4 billion (£1 billion).

Starboard, a separate hedge fund, is also understood to have purchased a stake of less than four per cent in the online marketplace.

Both hedge funds have been piling pressure on Ebay following the “rapid deterioration” of its valuation over the last year, seeing its share price plummet 35 per cent since early 2018.

Talks are still ongoing, and both investment firms have until March 1 to put forward potential board members should a deal be reached.

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Ben StevensCompanies

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