Norway’s Adevinta has bought eBay’s classified advertisements business for $9.2bn (£7.1bn), says Michael Cogley in The Daily Telegraph – creating the world’s biggest online classifieds group.
While Adevinta will pay $2.5bn of the purchase price in cash, the rest will come in the form of shares, making eBay Adevinta’s largest shareholder with a 44% stake. The hope is that by adding eBay Classified’s 12 brands in 13 countries to Adevinta’s 35 products in 15 countries, the Norwegian giant will be able to find savings of between $150m and $185m in “annual synergies”. The deal already seems to be paying off, say Richard Milne and Arash Massoudi in the Financial Times. Shares in Adevinta “rose by more than a third” shortly after it was announced, which for eBay lifted the paper value of the deal by “more than $2bn”.
This vindicates eBay’s CEO, James Iannone (pictured), who convinced directors at the weekend that the American e-commerce group should “retain exposure” to the classified advertisements business instead of acceptinga slightly lower all-cash offer of $9bn from its Dutch rival Prosus.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Iannone seems to have negotiated a “good valuation” for a business that’s “slower-growing than peers”, says Liam Proud on Breakingviews. However, it’s harder to see what Adevinta gets from it.
For instance, to achieve a 10% return on this investment, it will need to boost operating profit from last year’s $420m to $1.1bn – a big ask, “even if the pandemic boosts the number of people selling goods such as wardrobes online”.
-
Review: The Grill at the DorchesterThe Grill at the Dorchester has a new, easy-going atmosphere, but the food is serious: from punchy beef wellington to grown-up tarte tatin, says Dan McEvoy
-
Review: The Hut, Colwell Bay – a seafood lunch with a holiday feelTravel Getting to The Hut in Colwell Bay on the Isle of Wight is almost as rewarding as actually eating there
-
Pierre-Édouard Stérin wants to make France great againConservative billionaire Pierre-Édouard Stérin is seeking to lead a political and spiritual renaissance across the Channel. The planning looks meticulous
-
Global investors have overlooked the top innovators in emerging marketsOpinion Carlos Hardenberg, portfolio manager, Mobius Investment Trust, highlights three emerging market stocks where he’d put his money
-
Pinewood Technologies: a drive for growthPinewood Technologies’ platform is one of the best in the business. Investors should buy in
-
'EV maker Faraday Future will crash'Faraday Future Intelligent Electric is failing dismally to live up to its name, says Matthew Partridge
-
Investors should cheer the coming nuclear summerThe US and UK have agreed a groundbreaking deal on nuclear power, and the sector is seeing a surge in interest from around the world. Here's how you can profit
-
8 of the best houses for sale with folliesThe best houses for sale with follies in the grounds – from a five-storey Victorian Gothic tower in Tonbridge, Kent, to a former mill in Oxfordshire with gardens that include a folly on an island in a lake
-
A tale of two Reits – why performance matters for valuationAEW UK and Regional are two Reits that are valued very differently, despite a shared focus on properties outside London
-
Healthcare stocks look cheap, but tread carefullyShares in healthcare companies could get a shot in the arm if uncertainty over policy in the US wanes, but are they worth the risk?
