EBay: Adevinta Sale Closes With No Change to Fair Value Estimate; Shares Fairly Priced

The sale of narrow-moat eBay's stake in classified business Adevinta to a private equity consortium led by Permira and Blackstone has closed, effective May 29, 2024. Consistent with expectations, eBay receives $2.4 billion in taxable proceeds in exchange for a 22% stake in the business, leaving the online marketplace with an 18% share of the now-private company. The consortium maintains a six-month option to buy up to 10% more of eBay's Adevinta shares (that is, 56% of its remaining stake), which, if exercised, would reduce the firm's interest in the private business to just 8%. If the call option were exercised, it would prove slightly accretive to our $54 fair value estimate, given that we assign a 25% discount for lack of liquidity to the company's shares of the private entity. As it stands, we expect to make no changes to our intrinsic valuation, leaving shares trading in a range we'd consider fairly priced.