eBay to Make Cash Tender Offer of $24 Per Share for All Outstanding Gmarket
Shares; Move Significantly Strengthens eBay`s Leadership in World`s 6th Largest
E-Commerce Market
SAN JOSE, Calif.--(Business Wire)--
eBay Inc. (Nasdaq: EBAY) and Gmarket Inc. (Nasdaq: GMKT) today jointly announced
a definitive agreement for eBay to combine Gmarket, Korea`s leading e-commerce
business, with eBay`s existing online marketplace in Korea. Under the terms of
the agreement, eBay will make a cash tender offer of $24.00 per share for all
outstanding Gmarket common shares and American Depositary Shares, for a total
purchase price of up to approximately $1.2 billion assuming all outstanding
shares are tendered. As of April 15, 2009, the consideration of $24.00 per share
was equivalent to approximately 31,767 Korean won per share.
At closing, eBay will hold at least 67 percent of Gmarket as a result of shares
tendered pursuant to agreements to tender with members of management and other
investors sufficient to satisfy the minimum tender condition, as well as new
shares issued by Gmarket in connection with the combination of Gmarket and
eBay`s existing Korean marketplace business, Internet Auction Company.
Shareholders that have signed agreements to tender include Interpark Corporation
and its chairman, Ki Hyung Lee, current holders of approximately 34 percent of
the outstanding shares of Gmarket. eBay will combine Gmarket`s operations with
IAC, while maintaining separate sites.
"The combination of Gmarket and IAC establishes an exceptionally strong
leadership position for eBay in one of the world`s largest, most dynamic and
innovative e-commerce markets," said John Donahoe, eBay`s president and chief
executive officer. "This deal creates strong operational synergies between the
two market leaders, offers more opportunities for sellers and enhances our
ability to serve complementary consumer segments."
"We welcome eBay`s investment in Gmarket," said Young Bae Ku, Gmarket`s
president and chief executive officer. "This transaction will provide us an
excellent opportunity for our next growth stage in Korea and will also help
accelerate our expansion strategies beyond Korea. We look forward to teaming up
with eBay`s leadership both locally and globally to drive our future growth and
expansion."
The Board of Directors of Gmarket has voted unanimously to approve the
transaction and recommends that Gmarket security holders accept the offer. A
special committee of Gmarket's independent directors recommended approval of the
transaction to Gmarket's Board of Directors. The transaction, which is
conditioned on the tender of a majority of the outstanding shares and American
Depositary Shares of Gmarket on a fully diluted basis, final Korean antitrust
clearance and other customary closing conditions, is expected to close in the
second quarter of 2009. Following completion of the tender offer, shares of
Gmarket not purchased by eBay will remain outstanding and will be delisted from
The NASDAQ Stock Market. It is expected that there will not be an active trading
market for outstanding Gmarket shares following completion of the offer.
With more than 86 million active users, eBay Marketplaces generated $60 billion
of gross merchandise volume worldwide in 2008 and revenue of $5.6 billion. IAC
generated $2.2 billion of gross merchandise volume in 2008 and revenue of $161.2
million at an assumed exchange rate of 1262 KRW per USD. In 2008, Gmarket
generated $3.2 billion of gross merchandise volume and revenue of $220.8 million
at the same assumed exchange rate.
Through the combined businesses, eBay will be able to offer benefits for Gmarket
and IAC sellers, such as tools for quick, simultaneous listings across both
platforms, and enhanced experiences for buyers through improved selection,
incentives and loyalty programs. eBay also expects the combination with Gmarket
to provide a potential platform for further expansion within Asia.
The combination also provides the necessary support for Korean sellers who seek
access to eBay`s global network. By joining eBay`s Cross Border Trade program,
Korean small and medium sized businesses can export their products to buyers in
foreign countries. Jooman Park, president of IAC and Young Bae Ku, president of
Gmarket will jointly lead the combination of IAC and Gmarket and will manage the
integration of the two e-commerce companies.
Gmarket`s focus on fashion-oriented categories and IAC`s focus on computers,
electronics and sports give the two platforms core strengths in complementary
consumer segments. Females age 20-29, representing Korea`s fastest-growing
online segment, comprise more than 21 percent of Gmarket`s consumer base. Males
age 30 and over comprise IAC`s biggest consumer segment. Korea is the world`s
sixth-largest e-commerce market behind the United States, Germany, United
Kingdom, China and Japan. eBay has more than seven years of experience in the
market, beginning with its acquisition of IAC in 2001.
eBay Inc. will host an investor conference call on Thursday, April 16 at 6 a.m.
PDT to discuss this announcement. A live webcast of the conference can be
accessed through eBay Investor Relations Web site at http://investor.ebay.com.
An archive of the webcast will be accessible through the same link.
About Gmarket
Gmarket Inc. is a leading retail ecommerce marketplace in Korea, offering buyers
a wide selection of products at competitive prices and sellers a comprehensive
and flexible sales solution. Gmarket`s ecommerce marketplace is highly scalable
and facilitates the sale of products in small or large quantities to a large
number of potential buyers in a convenient, cost effective and secure manner.
Gmarket was founded in April 2000 and listed on Nasdaq in June 2006. Gmarket`s
e-commerce marketplace is located primarily at www.gmarket.co.kr.
About IAC
Founded in 1998 as an online auctioneer, Internet Auction Co. (IAC) has become
one of Korea`s leading online marketplaces with more than 21 million registered
users. Acquired by eBay in 2001, IAC has played a key role in improving Korea`s
retail e-commerce market through greater selection for buyers and diverse sales
solutions for sellers. IAC offers a wide range of products such as computers,
electronics and sporting goods to a dynamic online community of over 2 million
daily unique visitors. IAC`s online marketplace is located at www.auction.co.kr.
About eBay Inc.
Founded in 1995, eBay Inc. connects hundreds of millions of people around the
world every day, empowering them to explore new opportunities and innovate
together. eBay Inc. does this by providing the Internet platforms of choice for
global commerce, payments and communications. Since its inception, eBay Inc. has
expanded to include some of the strongest brands in the world, including eBay,
PayPal, Skype, Shopping.com, and others. eBay Inc. is headquartered in San Jose,
California.
Forward-Looking Statements
This announcement contains forward-looking statements, including statements
regarding eBay, IAC and Gmarket, that involve risks and uncertainties, and
actual results could differ materially from those discussed. Factors that could
cause or contribute to such differences include, but are not limited to, the
possibility that the transaction may not close; risks associated with eBay's
international operations (including foreign currency exchange rate fluctuations
and regulatory, political and economic conditions in Korea and other areas of
Asia); the reaction of users and suppliers of Gmarket`s and IAC`s services to
the transaction; the future growth of Gmarket`s and IAC`s services; the reaction
of competitors to the transaction; the contemplated integration of the employees
certain systems of each company, and the possibility that integration following
the transaction may be more difficult than expected; and the possibility that
the expected benefits of the acquisition of Gmarket may not materialize to the
extent expected or at all.
More information about factors that could affect eBay`s operating results can be
found in the company`s most recent annual report on its Form 10-K and its
subsequent quarterly reports on Form 10-Q (available at http://investor.ebay.com
or at the SEC`s website at www.sec.gov.). All forward-looking statements are
based on information available to eBay on the date hereof, and eBay assumes no
obligation to update such statements.
Additional Information and Where to Find It
This announcement is for informational purposes only and is neither an offer to
purchase nor a solicitation of an offer to sell shares or American Depositary
Shares of Gmarket. At the time the offer is commenced, eBay and its acquisition
subsidiary will file tender offer materials with the U.S. Securities and
Exchange Commission (the "SEC") and Gmarket will file a
Solicitation/Recommendation Statement with respect to the offer. The tender
offer materials (including an Offer to Purchase, a related Letter of Transmittal
and certain other offer documents) and the Solicitation/Recommendation Statement
will contain important information, which should be read carefully before any
decision is made with respect to the tender offer. The Offer to Purchase, the
related Letter of Transmittal and certain other offer documents, as well as the
Solicitation/Recommendation Statement, will be made available to all holders of
shares or American Depositary Shares of Gmarket at no expense to them at the
SEC`s web site at www.sec.gov. Free copies of these documents will be made
available upon request by mail to eBay Inc., 2145 Hamilton Avenue, San Jose, CA
95125, Attention: Investor Relations or to Gmarket Inc., 9th Floor, LIG Tower,
649-11 Yeoksam-Dong, Gangnam-Gu, Seoul 135-912, Korea, Attention: Investor
Relations.
In addition to the Offer to Purchase, the related Letter of Transmittal and
certain other offer documents, as well as the Solicitation/Recommendation
Statement, Gmarket and eBay file annual and special reports and other
information with the SEC. You may read and copy any reports or other information
filed by eBay or Gmarket at the SEC public reference room at 100 F Street, N.E.,
Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further
information on the public reference room. eBay`s and Gmarket`s filings with the
SEC are also available to the public from commercial document-retrieval services
and at the website maintained by the SEC at http://wwvw.sec.gov.
eBay Inc.
Alan Marks, Media hotline: 408-376-7458
or
Gmarket Inc.
Joo Beom Park, +82 2 3016 5763
or
INVESTOR:
eBay Inc.
Vandana Hariharan, 408-376-5877
or
Gmarket Inc.
Paul J. Lee, +82 2 3016 4372
Copyright Business Wire 2009
