eBay Inc. and GSI Commerce Announce Settlement of Claims Regarding Proposed Acquisition
June 13 2011 - 9:00AM
Business Wire
eBay Inc. (NASDAQ:EBAY) and GSI Commerce (NASDAQ:GSIC) announced
today that the companies have entered into a memorandum of
understanding, or MOU, with GSI shareholders settling claims filed
in Delaware state court related to eBay’s previously announced
acquisition of GSI. As a result, GSI shareholders will be paid a
settlement amount equivalent to about $0.33 a share.
The settlement is separate and distinct from the
payment of the $29.25 per-share merger consideration to be paid
pursuant to the terms of the merger. The settlement, which
will be paid at the same time as the merger
consideration, results in the lawsuits being
dismissed with prejudice on the merits and a general release
of eBay and GSI from any and all claims relating to, among
other things, the merger and the Agreement and Plan of
Merger. eBay and GSI have entered into the proposed settlement
to eliminate the uncertainty, burden, risk, expense, and
distraction of further litigation. For additional
details regarding the settlement, please see the Current
Reports on Form 8-K filed today by eBay Inc. and GSI
Commerce with the Securities and Exchange Commission.
The acquisition, which will be financed with cash and debt, is
now expected to close on June 17, 2011, subject to GSI shareholder
approval and other customary closing conditions. With more than 180
customers across 14 merchandise categories, GSI offers the most
comprehensive integrated suite of online commerce and interactive
marketing services available. GSI has long-term commerce services
relationships with leading retailers and brands. eBay Inc. expects
that GSI will benefit from eBay’s global platform and technology
capabilities, and its clients will be able to leverage eBay
Marketplaces and PayPal services.
As part of the transaction, eBay will divest 100 percent of
GSI’s licensed sports merchandise business and 70 percent of
ShopRunner and Rue La La. eBay believes these businesses are not
core to its long-term growth strategy. These assets will be sold to
a newly formed holding company, which will be led by GSI founder
and CEO Michael Rubin. The divestiture transaction is also expected
to close on June 17, 2011, and is subject to customary closing
conditions, including the closing of the merger.
About eBay Inc.
Founded in 1995 in San Jose, Calif., eBay Inc. (NASDAQ:EBAY)
connects millions of buyers and sellers globally on a daily basis
through eBay, the world’s largest online marketplace, and PayPal,
which enables individuals and businesses to securely, easily and
quickly send and receive online payments. We also reach millions
through specialized marketplaces such as StubHub, the world’s
largest ticket marketplace, and eBay classifieds sites, which
together have a presence in more than 1,000 cities around the
world. For more information about the company and its global
portfolio of online brands, visit www.ebayinc.com.
About GSI Commerce
GSI Commerce® enables ecommerce, multichannel retailing and
digital marketing for global enterprises in the U.S. and
internationally. GSI’s ecommerce services, which include
technology, order management, payment processing, fulfillment and
customer care, are available on a modular basis or as part of an
integrated solution. GSI’s Global Marketing Services division
provides innovative digital marketing products and services
comprised of database management and segmentation, marketing
distribution channels, a global digital agency to drive strategic
and creative direction and an advanced advertising analytics and
attribution management platform. Additionally, GSI provides
brands and retailers platforms to engage directly with consumers
through RueLaLa.com, an online private sale shopping destination,
and ShopRunner.com, a members-only shopping service that offers
unlimited free two-day shipping and free shipping on returns for a
$79 annual subscription.
Forward-Looking Statements
This press release contains forward-looking statements relating
to, among other things, the future performance of eBay and its
consolidated subsidiaries that are based on the company’s current
expectations, forecasts and assumptions and involve risks and
uncertainties. These statements include, but are not limited to,
statements regarding eBay and GSI Commerce. The company’s actual
results could differ materially from those predicted or implied and
reported results should not be considered as an indication of
future performance. Factors that could cause or contribute to such
differences include, but are not limited to: the possibility that
the transaction may not close; the reaction of consumers and GSI
Commerce’s customers; the future growth of GSI Commerce; the
reaction of competitors to the transaction; the possibility that
integration following the transaction may be more difficult than
expected; the company’s need and ability to manage regulatory, tax,
IP and litigation risks (including risks related to the transaction
itself) as its services are offered in more jurisdictions and
applicable laws become more restrictive; the after effects of the
global economic downturn, changes in political, business and
economic conditions, including any conditions that affect ecommerce
growth; fluctuations in foreign currency exchange rates; the
company’s ability to profitably integrate, manage and grow
businesses that have been acquired recently or may be acquired in
the future; the company’s need to increasingly achieve growth from
its existing users, particularly in its more established markets;
the company’s ability to deal with the increasingly competitive
ecommerce environment, including competition for its sellers from
other trading sites and other means of selling, and competition for
its buyers from other merchants, online and offline; the company’s
need to manage an increasingly large enterprise with a broad range
of businesses of varying degrees of maturity and in many different
geographies; the effect of management changes and business
initiatives; any changes the company may make to its product
offerings; the competitive, regulatory, credit card
association-related and other risks specific to PayPal and Bill Me
Later, especially as PayPal continues to expand geographically and
grow its open platform initiative and as new laws and regulations
related to financial services companies come into effect; the
company’s ability to upgrade and develop its systems,
infrastructure and customer service capabilities at reasonable
cost; and the company’s ability to maintain site stability and
performance on all of its sites while adding new products and
features in a timely fashion. The forward-looking statements in
this release do not include the potential impact of any
acquisitions or divestitures that may be announced and/or completed
after the date hereof.
More information about factors that could affect the company’s
operating results is included under the captions “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” in the company’s most recent annual report
on Form 10-K and subsequent quarterly reports on Form 10-Q, copies
of which may be obtained by visiting the company’s Investor
Relations web site at http://investor.ebayinc.com or the SEC’s web
site at www.sec.gov. Undue reliance should not be placed on the
forward-looking statements in this release, which are based on
information available to the company on the date hereof. eBay
assumes no obligation to update such statements.
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