January. 6. 2021
Skepticism persists over eBay’s profitable exit from Korea
|eBay headquarters in San Jose, California / EPA-Yonhap|
Goldman Sachs, Morgan Stanley mentioned to deal with tall job
By Park Jae-hyuk
Native brokerage analysts have expressed skepticism over whether or not Goldman Sachs and Morgan Stanley will be capable of assist eBay promote its sluggish Korean operation for the value it desires, 5 trillion received ($4.6 billion).
In line with media reviews and business sources, Wednesday, the U.S. e-commerce large employed the 2 world funding banks late final yr as dual-underwriters within the unloading of eBay Korea ― changing Credit score Suisse. The latter was unable to get the deal accomplished efficiently final yr.
Some sources mentioned eBay has already begun taking the mandatory procedures for due diligence, though its Korean operation has continued to disclaim hypothesis in regards to the sale.
These talked about as potential patrons embrace typical retailers Lotte, Shinsegae and Hyundai Division Retailer, and overseas and native personal fairness corporations (PEFs), equivalent to MBK Companions, Affinity Fairness Companions, Kohlberg Kravis Roberts (KKR) and Anchor Fairness Companions ― all of which declined to substantiate any potential curiosity.
Hana Monetary Funding analyst Park Jong-dae mentioned Coupang was additionally open to buying eBay Korea to extend market share earlier than its formidable itemizing on the Nasdaq; nonetheless, Park was skeptical about eBay Korea’s valuation, saying its ebook worth was too low.
“EBay Korea is not ideally positioned to enchantment to giant offline retailers right here by way of attractiveness as a result of its market share just isn’t excessive sufficient to create synergy,” he mentioned.
Hanwha Funding & Securities analyst Nam Sung-hyun mentioned eBay Korea was “overvalued.”
“The U.S. agency will be unable to promote its Korean subsidiary for five trillion received as a result of the supremacy of the market has already gone to Naver and Coupang,” he mentioned. “It can proceed to attempt to promote its Korean enterprise anyway (principally) because of its low development potential. The corporate missed the best second to make further investments.”
The operator of Gmarket and Public sale on-line marketplaces has been rumored to be placed on the native M&A market over the previous two years.
Elliott Administration’s interference in eBay within the U.S. since early 2019 has additionally led market insiders to anticipate the sale of the Korean operation because the activist hedge fund ― with a Four p.c stake ― has demanded larger-scale restructuring. The e-commerce agency accepted some calls for by providing Elliott a seat on its board and promoting the web ticketing platform StubHub.
In late 2019, eBay Korea was turned into a restricted legal responsibility firm which isn’t obliged to reveal its monetary assertion.
Though the corporate voluntarily introduced in April final yr that its 2019 gross sales rose 12 p.c, year-on-year, to 1 trillion received and its working income soared 27 p.c to 61.5 billion received, market analysts regarded the announcement as a part of its U.S. headquarters’ efforts to boost the unit’s valuation amid deteriorating development.