Exchange operator Intercontinental Exchange (ICE) owner NYSE made a takeover bid for eBay, reported The Wall Street Journal, citing several people, familiar with the situation. According to them, internet marketplace can be estimated at more than $30 billion.
Before this information emerged on Tuesday night, eBay had a market cap of about $28 billion. At the end of trading, the stock jumped by 8,8%, increasing it to $30,4 billion. ICE shares fell by 7,45%, capitalization fell to $51,6 billion.
ICE issued a message late Tuesday night, confirming interest in the transaction with eBay. ICE reached out to eBay to explore a range of potential opportunities, which can create value for the shareholders of both companies. EBay didn't get involved seriously [in their discussion]. We do not negotiate the sale of all or parts of eBay, - the message says. - ICE analyzes potential opportunities.
Why ICE Online Auction
Buying eBay would be an unusual move for ICE, which, over its 20-year history, mainly managed the marketplaces for financial instruments, пишет The Wall Street Journal. However, such a decision does not go beyond the global trend towards business diversification., experts say.
"Seem to be, that the exchange business seeks to go beyond its limits. There is an obvious global trend for the interaction of large financial companies and Internet giants. This is a natural movement, because they have many points of contact with the consumer ", Alexey Kiriyenko, Managing Partner of Exante, says.
In particular, previously announced the intentions of the London Stock Exchange (LSE) buy Refinitiv - the former analytical division of Thomson Reuters. An example is also the joint site of "Yandex" and Sberbank "Beru".
“In the genetics of this company (eBay) there is a stock exchange history, here the principles of trade in goods on the network and on the exchange actually coincide, Andrey Loboda, top manager of the investment and analytical company Alpari, commented on the possible takeover. "ICE's need for effective promotion and customer support can be complemented by sales channels through eBay in international markets.".
For ICE, buying eBay is an easy way to add value. It can be assumed, what ICE wants to try to make eBay second Amazon, finally leaving online auctions and switching to trading, says analyst of "Alor Broker" Alexey Antonov.
What is the reason for the strong price movement
Significant rise in eBay shares, maybe, related to, that the takeover by the exchange could be the solution to the company's existing problems. eBay was a pioneer in e-commerce. However, it now suffers greatly from competition, trying to keep up with Amazon.com and other similar companies.
“ICE investors didn’t like this step. This is evidenced by the fact, that they "vote" against, pushing ICE shares down. Many people really do not see the synergy between the exchange and the online trading platform., although ICE can bring some of its technological know-how ", - Antonov believes.
In addition, online auctions have gone out of fashion lately.. eBay reported fourth quarter earnings decline last week 2019 years and gave a weaker, than expected, first quarter revenue forecast.
