EBAY eBay Inc

By Cara Lombardo and Corrie Driebusch 

New York Stock Exchange owner Intercontinental Exchange Inc. has made a takeover offer for eBay Inc. that could value the sprawling online marketplace at more than $30 billion, according to people familiar with the matter.

Intercontinental Exchange, known as ICE, has approached eBay in the past and did so again recently, the people said. The companies aren't currently in formal talks and there is no guarantee eBay would agree to a deal.

Should there be one, it would be big, given eBay's market value of more than $28 billion and the premium ICE would likely have to pay.

ICE is primarily interested in owning eBay's core marketplace business, the people said, and not its classified unit, which eBay has been considering selling. The classified unit could fetch around $10 billion in a sale, people familiar with the matter have said.

ICE may see an opening to apply its technological expertise connecting buyers and sellers to eBay's core e-commerce site covering everything from electronics to collectibles.

EBay shares soared on news of the possible deal, first reported by The Wall Street Journal, and were up more than 7% in afternoon trading Tuesday. Intercontinental Exchange stock fell more than 5% as investors digested the possibility of another huge bite by the acquisitive company.

EBay was a pioneer in e-commerce but has struggled to keep up with competitors such as Amazon.com Inc. The company has sought to distance itself from its reputation as an online auction house -- as opposed to an electronic marketplace -- as online auctions have fallen out of vogue. As the luster it enjoyed in the dot-com era has worn off, eBay has attracted the attention of multiple activist investors in recent years including Carl Icahn, who pushed for its 2015 spinoff of the payment platform PayPal Holdings Inc.

Roughly a year ago, activist hedge funds Elliott Management Corp. and Starboard Value LP urged eBay to consider selling both its StubHub ticketing and classified-ads businesses. EBay later struck settlement deals that handed the funds board representation.

EBay late last year agreed to sell StubHub to Geneva-based Viagogo Entertainment Inc. for $4.05 billion.

The company has been without a permanent chief executive since former CEO Devin Wenig left in September, citing clashes with the board. Unfilled executive ranks are often seen as opportunities for suitors to pounce.

"In the past few weeks it became clear that I was not on the same page as my new board," Mr. Wenig tweeted from his personal account following his resignation. "Whenever that happens, its best for everyone to turn that page over."

EBay last week reported a declining profit in its latest quarter and gave a weaker-than-expected first-quarter revenue outlook. Its shares lost 4.5% the following day and closed Monday at $34.39.

On its earnings call, when asked by an analyst if eBay's core business is part of the company's strategic review, interim Chief Financial Officer Andrew Cring said "Everything is part of it."

On Tuesday, Starboard published another letter to eBay management saying the company hasn't made enough progress and called on it to commit to a separation of its classifieds business.

ICE is best known for operating the NYSE as well as futures exchanges around the world. Chief Executive Jeffrey Sprecher founded the company in 2000 and has turned it into a global exchange empire by acquiring stock and futures markets including the London-based International Petroleum Exchange in 2001 and the Chicago Stock Exchange in 2018. ICE also runs a number of financial-data businesses and clearinghouses for derivatives trades.

Acquiring eBay would be an unusual move for Atlanta-based ICE, which in its 20-year history has largely stuck to running marketplaces for financial instruments like stocks and derivatives, rather than the sorts of consumer goods sold on San Jose, Calif.-based eBay's platform.

Still, ICE has a history of buying underperforming trading platforms and making them more profitable. Since closing its acquisition of the NYSE in 2013, it has slashed expenses at the Big Board, revamped its outdated trading systems and spent tens of millions of dollars on renovating the exchange's historic building in Manhattan to make it a splashier place to host initial public offerings.

ICE's interest in eBay comes as the traditional way that exchange groups have grown -- through cross-border takeovers of rival market operators -- has gotten tougher, due to the increasing consolidation of the business and regulatory obstacles. In 2016, ICE explored a possible offer for London Stock Exchange Group PLC, but retreated, allowing Deutsche Börse AG to pursue a bid for the LSE that was ultimately scuttled by European Union regulators. In 2017, ICE was forced to unwind its acquisition of Trayport, a European energy-trading platform, after opposition from U.K. antitrust authorities.

--Alexander Osipovich contributed to this article.

Write to Cara Lombardo at cara.lombardo@wsj.com and Corrie Driebusch at corrie.driebusch@wsj.com

(END) Dow Jones Newswires

February 04, 2020 16:02 ET (21:02 GMT)

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