A consortium backed by private equity firms Permira and Blackstone is reconsidering its pursuit of European online classified ads company Adevinta due to a price gap that cannot be resolved. This development has led the buyout group to bring the deal back to its investment committee for further evaluation. Recent market conditions have also played a significant role in dampening the enthusiasm for the bid. Adevinta, which has a market cap of approximately $11.4 billion, is backed by EBay.
Price Expectations at Odds
Permira and Blackstone have been unable to reach an agreement with Adevinta’s independent board committee on price expectations for the acquisition. Despite ongoing negotiations, the consortium is struggling to bridge the gap. The inclusion of the Abu Dhabi Investment Authority in the investor group further complicates decision-making. As a result, the consortium is yet to finalize its plans and may still proceed with the offer.
Market Reaction and Previous Achievements
Adevinta’s stock price surged by 21% following the news of the buyout interest, which was first reported on September 21. This increase reflects investors’ positive response to the potential takeover. EBay, a significant stakeholder in Adevinta, expressed support for the proposal. Moreover, Adevinta’s shares have experienced a remarkable 58% growth throughout the year. Notably, Adevinta acquired eBay’s online classifieds business in a $9.2 billion cash and stock deal in 2021.
Concerns Raised by the Special Committee
Manager Magazin from Germany initially reported the concerns raised by the special committee regarding the bid from the private equity consortium. These concerns have contributed to the consortium’s decision to reassess the feasibility of the acquisition. With the price gap and market conditions at play, the committee’s concerns warrant further examination.
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