eBay’s secondary ticketing platform StubHub could be sold or spun off, following a strategic review of the division announced on Friday (March 1).
The impending review of StubHub, as well as the eBay Classifieds Group, follows an open letter issued in January by one of eBay’s largest investors, Elliott Management Corporation, calling for a “comprehensive portfolio review” and suggesting that the divestitures of the subsidiaries will create more value for eBay shareholders.
The ecommerce giant has said however, that “there can be no assurance that the strategic review being undertaken will result in a sale, spin-off or other business combination involving eBay’s assets”.
According to the letter signed by Elliot Partner Jesse Cohn, StubHub and eBay’s portfolio of Classifieds properties “represent high-value, strategic assets that are worth meaningfully more than the value currently being ascribed to them as part of eBay”.
Added the letter: “In addition to unlocking substantial value, separating these assets would allow eBay’s management team to refocus its efforts solely on the core Marketplace business”.
The operating review will be carried out by the eBay management team and overseen by the Board of Directors, with the findings expected to be announced at an event in the Fall.
The immediate appointment of Cohn and Matt Murphy of Marvell Technology to the Board of Directors was also announced by eBay on Friday.
A third new independent director will be added later in the year.
According to Elliot, StubHub currently enables the transaction of more than $4.5 billion in ticket value, up roughly 50% over the past four years.
“The bottom line is that we all share common ground: we see tremendous opportunity ahead and want to see eBay’s full potential realized over the long-term.”
Devin Wenig, eBay
Devin Wenig, President and CEO of eBay Inc., said: “Over the course of the last two months, we’ve met with a number of shareholders to understand their views.
“The bottom line is that we all share common ground: we see tremendous opportunity ahead and want to see eBay’s full potential realized over the long-term. The initiatives we are announcing today are the result of this constructive dialogue.”
“We are confident that the initiatives announced today will drive meaningful shareholder value.”
Jesse Cohn, Elliott
Jesse Cohn, Partner at Elliott, added: “Our discussions with Devin and the Board have been positive and productive, and we are pleased to have worked collaboratively to reach this agreement.
“We are confident that the initiatives announced today will drive meaningful shareholder value. Personally, I am looking forward to joining the Board and working with my fellow directors towards our mutual goal of positioning eBay for success and value creation.”
Peter Feld, Managing Member of Starboard Value, said: “We are pleased with the changes underway at eBay and look forward to seeing the results of the Company’s announced operating and strategic reviews.
“We welcome the new directors to eBay and expect to maintain an ongoing and constructive dialogue with management and the Board.”Music Business Worldwide