Lotte and Shinsegae have begun looking into acquiring eBay Korea that has been offered for sale. Competition between companies has become fiercer as major retailers have placed their names as a potential buyer of eBay Korea in addition to Kakao and a private equity fund called MBK Partners.
According to the industry on Thursday, Morgan Stanley and Goldman Sachs that are overseeing eBay Korea’s sale sent out information memorandum (IM) to potential buyers of eBay Korea before a preliminary bidding takes place on March 16. It is reported that about ten candidates such as MBK Partners, Lotte Group, Shinsegae Group, Kakao, and Qoo10 received memorandums from Morgan Stanley and Goldman Sachs.
Lotte Group and Shinsegae Group have been emerged as potential buyer of eBay Korea. However, it is not certain whether either of them will participate in the preliminary bidding that will take place on March 16. In case of Lotte Group, it has yet to choose a consulting company that will assist the group in the buying process.
“Although we received an IM on eBay Korea, it does not mean much as any company can receive an IM if it shows some desire in acquiring eBay Korea.” said a representative from Lotte Holdings. “We have yet to select a consulting company either.”
In case of Hyundai Department Store Group that was mentioned as a potential candidate, withdrew itself from the list of candidates. One representative from the group said that the group is not looking into acquiring eBay Korea at all and that the group did not even request an IM from Morgan Stanley and Goldman Sachs.
Kakao and Shinsegae Group are seen as likely candidates that will end up acquiring eBay Korea. Kakao is growing its dominance based on its position in the mobile platform field. Its revenue from mobile gifts that includes the company’s e-commerce business in 2020 was $320 million (360.3 billion KRW) which is an 64% increase compared to 2019. If Kakao acquires eBay Korea, it will be able to immediately change its e-commerce business which is currently centered on mobile gifts into an open market.
Shinsegae Group will be able to quickly grow the size of SSG.com with an acquisition. The turnover of SSG.com in 2020 was around $3.45 billion (3.9 trillion KRW) and it will be able to easily reach $22 billion (25 trillion KRW) if the group acquires eBay Korea. Although SSG.com was close to becoming an open market for strengthening of merchandise assortment, the process has come to a halt when President Kang Hee-seok was appointed as the new president of SSG.com. Because Shinsegae Group is considering an open market model that is able to create synergy with SSG.com, there is a good chance that the group is seeing acquisition of eBay Korea as an alternative.
MBK Partners, which is the major shareholder of Homeplus, is reportedly looking into acquiring eBay Korea as it considers connecting its offline business with eBay Korea’s online business. Homeplus’ online sales in 2020 fell short of $890 million (1 trillion KRW) and they are considerably low compared to that of other major retailers.
It is reported that every potential candidate received an IM after signing a NDA (Non-Disclosure Agreement). However, they are hesitant on being called a genuine buyer of eBay Korea yet. The offer of $4.4 billion (5 trillion KRW) that eBay put out for eBay Korea is also burdensome for the candidates. One official from the industry said that the candidates are still considering whether they will participate in the bidding process or not as the IM that was sent to them does not talk about the selling price in detail.
Staff Reporter Park, Joonho | junho@etnews.com