Prosus NV is hoping eBay classifieds won’t be the auction that got away.
Having lost an $8 billion battle to buy Just Eat to Takeaway.com in January, the e-commerce group is the party to beat in a hotly-contested auction process for the eBay business, according to people familiar with the matter.
By pursuing the EBay unit, potentially valued at as much as $10 billion, Prosus is looking to seal its biggest purchase since spinning off from South African technology giant Naspers last year. Prosus holds assets including a stake in Chinese Internet giant Tencent Holdings, as well as businesses from Brazil to Germany in industries such as online food delivery and classified advertising.
Naspers opted to separate Prosus - in which it retains a majority holding - in the hopes shareholders would assign more value to its investments around the world. While the listing in Amsterdam was a chance for Prosus to begin an aggressive acquisition spree, a big deal has yet to materialise.
It also missed an opportunity to expand in the US after the combined Just Eat Takeaway.com agreed to acquire Grubhub for $7.3 billion in June.
With about $7 billion in cash and ample liquidity from a long-list of lenders, Prosus has the financial power to pursue large mergers and acquisitions and is on the lookout for opportunities, according to Chief Executive Officer Bob van Dijk.
"I am excited about the deals that might happen because it would really reinforce the business we have," he said in a phone interview this week. "The pipeline is looking quite healthy."
Prosus is competing with two bidders for EBay’s classified-advertising unit, according to people familiar with the matter. One is a consortium comprising buyout groups Blackstone Group, Permira and Hellman & Friedman LLC and the other is Oslo-based online marketplace Adevinta ASA. Even some backers of these rival bids view Prosus as the heavy favourite, the people said.
Representatives for EBay and Prosus declined to comment.
EBay is seeking a sale of the unit at a time when market turmoil has hampered financing for leveraged buyouts, forcing companies to put a number of bidding processes on hold. The sale process is advanced and a decision on a winner is likely to happen in July, the people said.
Prosus’s strong financial position and backing by Naspers will give it an edge in a tough environment for dealmaking. Winning the EBay bid could just be the fillip it needs for more M&A. Prosus’s shares declined 0.7% to 82.20 euros as of 12:01 p.m. Wednesday in Amsterdam.
- With assistance from Loni Prinsloo and Scott Deveau.
- Fin24 is part of 24.com, which is in the Naspers-owned Media24 stable.