Axel Springer, the German-based digital publishing house that is backed by KKR & Co., a global investment firm with offices in New York, has submitted an initial bid for the eBay division.
Prior to COVID-19, it was expected that a deal for the classifieds unit could be worth up to $10 billion.
eBay could decide as soon as next week who reaches the next round, the sources said.
The San Jose, California-based company reported revenues of $2.4 billion in the first quarter of 2020, down 2 percent from the same period one year ago. eBay shares rose by 2.3 percent at the close on Friday (May 22), according to Yahoo! Finance.
Analysts say that if the deal is signed, it could be among the largest transactions of the year in Europe between private equity firms.
The news service reported that the publisher will face competition from the South African eCommerce company Naspers; Adevinta, which owns the Shpock platform; and a private equity consortium consisting of Hellman & Friedman, Blackstone and Permira.
In February, PYMNTS reported that eBay was getting closer to selling off its classified advertising business. At the time, interested parties included Axel Springer, Naspers, Blackstone Group and TPG.
The sale comes at a time when market turmoil has hampered financing for leveraged buyouts, forcing companies to put a number of bidding processes on hold, FT reported.
Representatives for Adevinta, Axel Springer, Blackstone, KKR, Naspers and Permira declined to comment. Spokespeople for eBay and Hellman & Friedman didn’t immediately respond to requests for comment.
Bloomberg News reported that Naspers’ CEO Robert Van Dijk said he is seeking to boost its portfolios in classifieds, food delivery and digital payments businesses, as well as education.
While the transaction is in its early stages, eBay is under pressure from activist investors Starboard Value and Elliott Management, the FT reported.
Springer executives have said KKR’s leverage will help the group further expand in the market through acquisitions.