EBay Agrees to Sell Stake in Adevinta for $2.25 Billion

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EBay Inc. has agreed to sell part of its stake in Adevinta ASA for about $2.25 billion to Permira in order to win regulatory approval for the companies’ plan to combine their classifieds businesses.

The deal for the 125 million shares is expected to close in the fourth quarter and will cut EBay’s ownership in the Norwegian digital marketplace to 34% from 44%, EBay said in a statement on Wednesday. It’s part of an agreement with Austrian regulators to reduce its ownership in Adevinta to 33%.

Regulators have taken a close look at EBay and Adevinta’s $9.2 billion deal, and EBay has already offered to divest its British Gumtree business as well as its Motors.co.uk site to win approval in the U.K. The deal was Norway’s biggest in more than a decade and significantly increased the size of Adevinta, which was spun off from Scandinavian media conglomerate Schibsted ASA.

Adevinta originally outbid larger rivals -- as well as a private equity consortium that included Permira -- for EBay’s online classifieds business in a cash-and-stock deal last year. The Oslo-based company used its small size to its advantage by offering a significant amount of its shares to secure the deal, a structure that gave EBay a sizable stake in the new company and the potential to continue to profit from growth in the classifieds business.

The offer works out to about $18 a share, or about 10% lower than Adevinta’s last closing price at current exchange rates. The price represents a 7% discount to 10-day volume weighted average price, EBay said.

Adevinta’s shares rose 1.2% to 177.80 kronor at 9:41 a.m. in Oslo trading on Wednesday. The stock has gained 23% so far this year. EBay was little changed at $68.74 in New York on Tuesday.

EBay has also given Permira an option to purchase about 10 million additional shares at the same price. If exercised, this will cut EBay’s ownership in Adevinta to 33%.

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