Shinsegae's Acquisition of eBay, "The Problem Is the Too High Sale Price"

eBay Korea's Sole Acquisition Candidate Still No Official Announcement
"More Advantageous Terms" Calls for Caution Grow... Stock Purchase Agreement to Be Signed Next Week

[Image source=Yonhap News]

[Asia Economy Reporter Jo In-kyung] Although Shinsegae Emart remains the sole candidate in the eBay Korea acquisition battle, the official announcement continues to be delayed. It is observed that the announcement of the preferred bidder selection is postponed due to last-minute negotiations with eBay headquarters, while it is also known that there are sharp disagreements within Shinsegae regarding the acquisition price.

"Under Discussion for 3 Days, Not Confirmed"

On the 18th, Emart maintained the stance that "there has been no notification from eBay headquarters." Even three days after the eBay headquarters board meeting ended on the 16th, the same position was reiterated. In response to the stock exchange's inquiry disclosure request, Emart stated, "The rumor that we have been virtually confirmed as the acquirer of eBay Korea is not true," adding, "We are in discussions with eBay headquarters, but nothing has been finalized."

This eBay Korea acquisition was pushed forward under the full support of Shinsegae Vice Chairman Chung Yong-jin and the proactive drive of Emart CEO Kang Hee-seok, despite internal opinions that it was "too expensive." This contrasts with Lotte, where Chairman Shin Dong-bin expressed acquisition intentions but set a relatively conservative investment ceiling and withdrew after bidding.

With Lotte Out, Calls for Caution Gain Strength

However, when Lotte Shopping, the only rival bidder, suddenly declared withdrawal from the acquisition, it is reported that cautious voices within Shinsegae gained momentum, emphasizing the need to secure more favorable terms before finalizing the deal.

According to the investment banking (IB) industry, Shinsegae reportedly offered to acquire an 80% stake in eBay Korea for about 3.5 trillion KRW. Lotte is estimated to have bid in the high 2 trillion KRW range based on a 100% stake acquisition.

The nearly 1 trillion KRW difference between the prices proposed by Lotte and Shinsegae strengthened the cautious stance within Shinsegae. Furthermore, although a consortium was formed with Naver, the scale and method of investment have yet to be finalized, causing internal confusion.

A senior official in the distribution industry explained, "During the bidding process, eBay demanded higher prices from both Shinsegae and Lotte. Lotte judged that additional financial burden was too much and gave up competing, whereas Shinsegae made a bold bet. With Lotte’s withdrawal, Shinsegae likely faced complaints such as 'Are we paying too much alone?'"

Optimism vs. Realism

Initially, even as eBay Korea’s valuation expanded from 3 trillion to 5 trillion KRW, optimism that "growth of two to three times or more is possible through synergy with Emart and SSG.com" clashed with realism that "1+1 may not equal 2," leading to divided opinions.

The signing of the stock purchase agreement (SPA) between eBay and Shinsegae for the acquisition of eBay Korea is expected to take place as early as next week. An IB industry insider said, "Usually, after being notified as the sole negotiator, the SPA is signed within several days to a week. Since withdrawing midway would incur significant penalties, Shinsegae is likely to finalize its position soon."

This content was produced with the assistance of AI translation services.