eBay seeks to take auction site private

EBay, an online auction site based in the United States, said yesterday that it would buy all outstanding shares of its Korean subsidiary, Internet Auction Co., with the ultimate aim of taking the business private. In Feb. 2001, eBay acquired just over 50 percent of Auction, which is listed on the Kosdaq market. About 80 percent of the shares not now in eBay’s hands are owned by other foreign investors and the rest by small Korean shareholders. In newspaper advertisements yesterday, eBay made a cash tender for all 6.4 million publicly held shares of Auction at 70,000 won ($59) per share between Friday and Dec. 10. It estimated the cost to buy all the shares at $382 million. “We believe that it makes good business sense,” eBay said in a press release. But Auction officials said they were taken aback by the announcement, and that they had no idea of the reasoning behind the plan or the reason they were not informed in advance. “We are pretty large in size, and had never expected that eBay would lay out that much cash to own the company completely,” said Choi Sang-gi, an Auction spokesman. “But eBay is already our largest shareholder, so we do not expect many changes.” EBay has 26 operations worldwide in addition to its U.S. Web site. Auction is now the only listed subsidiary of the auction company. It is also the third-largest subsidiary of eBay in terms of transaction value on the site. The German subsidiary is the largest, followed by the British site. “If we acquire a sufficiently large percentage of Internet Auction, we intend to delist it from the Kosdaq as soon as practicable, respecting all legal and regulatory requirements in the process,” eBay said. Auction rose by the 12-percent limit yesterday to close at 62,600 won. by Kim Hyo-jin