A JUDGE yesterday rescinded a protective measure adopted by the board of popular classifieds site Craigslist to block a potential hostile takeover by e-commerce site eBay.
eBay had complained that the measure diluted its stake in its smaller rival from 28.4 per cent to 24.85 per cent.
In a split ruling, the decision in Delaware’s Chancery Court left in place Craigslist’s staggered board provisions.
At the centre of eBay’s lawsuit filed in Delaware in 2008 was the online giant’s true stake in Craigslist.
In 2004, ebay paid $32m for a 28.4 per cent interest in Craigslist – paying both founder Craig Newmark and chief executive Jim Buckmaster $8m each in the bargain – but relations between the two companies deteriorated after eBay launched a rival US classifieds business, Kijiji, in 2007.
Craigslist yesterday responded by diluting that company’s stake to 24.85 per cent in what eBay called “a coercive plan” that stripped it of a board seat. Craigslist executives said it was a self-protective measure designed to fend off a hostile takeover.
eBay is the world’s most visited ecommerce site.
City A.M. Reporter