EBay, owner of the largest e- commerce market, agreed to buy GSI Commerce for about $2.4 billion to add services that help retailers market and distribute their wares.
GSI investors will get $29.25 a share in cash, San Jose, California-based EBay said today in a statement. That’s 51 per cent more than GSI’s closing price on the Nasdaq Stock Market on March 25. EBay plans to finance the deal with cash and debt.
EBay CEO John Donahoe, two years into a three-year campaign to revive sales growth amid competition from Amazon.com, said the acquisition will help the company do a better job connecting buyers and sellers. GSI, based in King of Prussia, Pennsylvania, has long-term commerce-services relationships with retailers and brands, EBay said.
“EBay is lagging Amazon in becoming a platform for third- party sellers because Amazon has a bigger distribution network, which lowers costs,” said Jason Helfstein, an analyst at New York-based Oppenheimer & Co who has “outperform” ratings on GSI and Amazon shares and no rating on EBay. “This deal positions EBay with additional distribution centres and GSI’s customer list.”
GSI Commerce rose $9.74, or 50 per cent, to $29.12 in Nasdaq trading at 11.47 am New York time. EBay fell 91 cents to $30.79. The shares had risen 14 per cent this year before today.
GSI has 40 days to solicit proposals from other potential bidders, the companies said. EBay then has a right to match any superior proposal.
The company said it plans to divest 100 per cent of GSI’s licensed sports-merchandise business, and 70 per cent of online- retail sites ShopRunner and Rue La La.