eBay buys Shopping.com for $620m cash

The deal represents a 21% premium over Shopping.com's share price.

eBay will acquire all outstanding shares of Shopping.com stock for $21 per share in cash. On the basis of the number of Shopping.com shares outstanding on May 31, 2005, the total consideration will amount to approximately $620 million. This compares with a market cap for Shopping.com at the opening of trading yesterday of $520 million.

Shopping.com's cash, cash equivalents, and marketable securities as of May 31, 2005 totaled approximately $140 million.

The acquisition is subject to regulatory and Shopping.com shareholder approvals. It is expected to close in the third quarter of 2005.

Shopping.com (formerly Dealtime) was founded in 1997 with initial finance from Israel Seed Partners. Last October, the company was floated on Nasdaq at a value of $500 million. After the flotation, the share price shot up to give the company a market cap of some $1 billion.

Daniel Ciporen, the chairman and CEO of Shopping.com until yesterday, owns 2.8% of the company, and is expected to make $17.5 million on the deal. He sold shares for $1.1 million when Shopping.com went public, and earned $1.5 million in salary during his six years at the helm of the company. His accumulated capital is therefore $20 million.

Shopping co-founded and CTO Amir Ashkenazi owns 1.8% of the company, and will make $11.4 million on the deal. Noam Sharfman owns 2.2% of the company, and will make $13.1 million. Former Shopping.com COO Nirav Tolia owns shares worth $15.5 million.

Bertelsmann owns 10.4% of Shopping.com, and will make $65 million on the deal. August Capital will make $44.5 million on its 7.2% stake, Benchmark Capital will make $45.2 million on its 7.3% stake, and Israel Seed Partners will make $40.5 million on its 6.5% stake. Israel Infinity Venture Capital will make $12 million on its 2% stake.

Published by Globes [online], Israel business news - www.globes.co.il - on June 2, 2005