January 21, 2007 / 12:05 PM / 13 years ago

eBay to pay around $300 million to buy StubHub, sources say

SAN FRANCISCO (Reuters) - Online auctioneer eBay Inc. (EBAY.O) could reveal as early as Thursday its plans to buy sports ticket reseller StubHub for more than $300 million, people familiar with the deal said on Wednesday.

One source with knowledge of the talks said a cash deal had been agreed to by San Jose, California-based eBay. The agreement calls for eBay to acquire San Francisco-based StubHub at a value in the “low $300 million” range and could be announced on Thursday.

StubHub, which had more than $400 million in gross ticket sales in 2006, has emerged as the leading independent player in the online resale market for sports tickets. Fans using the service can avoid the perils of scalping unused tickets.

Officials of the two companies declined to comment.

“We have no comment on that,” said Jeff Fluhr, co-founder and chief executive of StubHub. “There are rumors all the time. There were rumors on this four months ago.”

An eBay spokesman also declined to comment.

One source cautioned that any deal could still come undone. In 2002 eBay had come close to acquiring StubHub for $20 million but that the tentative agreement had fallen apart over price, a separate source said.

Shares of eBay were off 39 cents, or 1.31 percent, to $29.36 in late Nasdaq trading on Wednesday.

EBay is StubHub’s biggest competitor. Other major rivals include IAC/InterActiveCorp’s IACI.O Ticketmaster, Craigslist, along with gray-market stadium scalpers.

Sellers send tickets via overnight delivery to buyers and StubHub acts as middleman to ensure the privacy of buyers. StubHub offers a secure way to connect buyers and sellers of tickets, with a money-back guarantee to insure that buyers are not cheated out of tickets.

StubHub boasts resale relationships with 30 big name professional and college sports teams, Fluhr said in an interview last month. It has begun to expand into the resale market for music concerts, theater tickets and other events.

The U.S. secondary ticket market has a turnover around $10 billion a year. This is in addition to the $25 billion primary ticket market not just for sports, but for music and other entertainment, Fluhr said.

The company has received an undisclosed amount of funding since it first raised $2.1 million in 2001.

Investors include Allen & Co., Frank Biondi, Sandy Robertson of Francisco Partners and Steve Young, the ex-quarterback of the San Francisco 49ers. It raised its last round of financing in 2005, according to Fluhr.

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