EBay is set to buy online retailer GSI Commerce for $2bn (£1.25bn).
It has offered GSI shareholders $29.25 a share – a massive 51 per cent premium on their pre-bid closing price. GSI shares have since risen more than 50 per cent, while EBay’s have fallen 2.7 per cent.
EBay hopes the deal will draw more buyers and sellers to its online marketplaces and win more business from large store chains.
GSI owns online businesses such as Rue La La, which offers one-day-only web deals to its members, and ShopRunner, a members-only online shopping service that offers free shipping. It also provides retailers with technology, payment processing and customer care services for their e-commerce sites.
For EBay, GSI is attractive because of its expertise in taking customer orders, managing them, and sending them out, an area in which online retail rival Amazon.com excels.
EBay chief executive John Donahoe said GSI’s services are also a way for EBay to woo large retailers looking to beef up their electronic capabilities.
As part of the deal, EBay will sell off GSI’s licensed sports merchandise business and 70 per cent of ShopRunner and Rue La La, which will all become part of a new holding company run by GSI’s founder and chief executive Michael Rubin.
EBay will lend Rubin’s new company $467m.
City A.M. Reporter