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eBay Reportedly Closer to Selling Its Classified Ads Business

By James Brumley – Feb 21, 2020 at 6:23PM

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Sources are starting to name specific suitors and citing potential prices, which would suggest serious discussions.

After months of prodding and weeks of speculation that it would happen, online auction company eBay (EBAY -2.38%) may be closer than ever to shedding its classified ads unit.

The Wall Street Journal reported on Friday afternoon that, according to people familiar with the matter, a handful of private equity firms were interested.

Photograph of businessman handing cash to another businessman.

Image Source: Getty Images.

eBay, struggling to compete with Amazon.com, attracted the attention of activist investment groups Elliot Management and Starboard Value early last year. Both recommended the organization spin off its classified ads business as well as event ticket reselling platform StubHub as a way of unlocking value and improving focus on the company's core e-commerce business.

StubHub was shed in December for $4 billion, but the company still owns its classified advertisement arm.

That could be soon be changing too though, with most of the interest reportedly coming from private equity firms. TPG and Blackstone Group (BX) are the most recognizable prospective suitors, while South Africa's e-commerce name Naspers and German publishing company Axel Springer were also cited as possible buyers. Interested parties have through March to make their pitch to eBay.

If sold, the Journal's sources believe eBay's classifieds business -- mostly used in overseas markets -- could fetch on the order of $10 billion.

A leaner eBay could also attract new acquisition interest in its remaining e-commerce business, should the classifieds unit be sold. Intercontinental Exchange already expressed some interest in buying eBay, and though it ultimately chose not to pursue a deal, other organizations may be entertaining the idea, waiting to see the company pare itself down to just its online auction and e-commerce unit.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. James Brumley has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and Intercontinental Exchange. The Motley Fool recommends eBay and recommends the following options: long January 2021 $18 calls on eBay and short January 2021 $37 calls on eBay. The Motley Fool has a disclosure policy.

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Stocks Mentioned

eBay Inc. Stock Quote
eBay Inc.
EBAY
$37.69 (-2.38%) $0.92
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$114.80 (-2.72%) $-3.21
The Blackstone Group L.P. Stock Quote
The Blackstone Group L.P.
BX
Intercontinental Exchange, Inc. Stock Quote
Intercontinental Exchange, Inc.
ICE
$90.75 (-2.47%) $-2.30

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