Axel Springer, the German media group backed by private equity firm KKR, has submitted an initial bid for eBay’s classifieds business, according to people familiar with the matter, as the ecommerce group embarks on one of the biggest sale processes since the outbreak of the coronavirus pandemic.
The publisher of Die Welt and Bild and its US backer will face competition from groups including South African ecommerce group Naspers, the classified group Adevinta, which owns the Shpock platform, and a private equity consortium of Hellman & Friedman, Blackstone and Permira, the people said.
The process is still at an early stage, they added.
Ebay, which is under pressure from activist investors Starboard Value and Elliott Management and sold its StubHub business to Viagogo for $4bn last year, has been considering its options for several months.
Before the pandemic began, analysts estimated that the classifieds business, which includes vehicle marketplaces in Denmark, Germany, Italy and the UK, and general classifieds platforms such as Gumtree, could fetch between $8bn and $12bn.
However, it is not clear whether a deal could still go ahead at that price. Shares in rival classifieds businesses such as Auto Trader, Rightmove and Carsales.com have fallen since late February, with Rightmove shares down as much as 25 per cent since property viewings were put on hold in March.
The private equity firms, Axel Springer, eBay and Naspers all declined to comment.
The sale will be the first test of dealmakers’ appetite for large-scale auction processes since the pandemic began, one person involved said. The crisis has made it harder to raise the debt financing needed for leveraged buyouts. “The key is, do you see banks willing to underwrite the risk?” the person said.
Axel Springer has been linked to a possible bid for eBay’s classifieds business since at least last summer, when it announced the take-private agreement with KKR.
The German group already operates one of the world’s biggest portfolios of digital classified businesses, including the job portal StepStone and property sites such as Immonet. Springer executives have said KKR’s leverage will help the group further expand in the market through acquisitions.
Last year Hellman & Friedman bought the German classifieds group Scout24’s car trading business AutoScout24 in a €2.9bn deal. That came after Hellman & Friedman and Blackstone failed in a bid last May to buy the whole Scout24 business, which they listed in 2015.