SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule TO
Tender Offer Statement under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934
Gmarket Inc.
(Name of Subject Company (Issuer))
eBay KTA (UK) Ltd. (Offeror)
eBay Inc. (Parent of Offeror)
(Names of Filing Persons)
Common Shares, par value KRW
100 per share
American Depositary Shares, as evidenced by American Depositary Receipts,
each representing one Common Share
(Title of Class of Securities)
The Common Shares, which are not traded on U.S. markets, have not been assigned a CUSIP
number.
The CUSIP number for the related American Depositary Shares is 38012G100.
(CUSIP Number of Class of Securities)
Michael R. Jacobson, Esq.
Senior Vice President, Legal Affairs, General Counsel and Secretary
eBay Inc.
2145 Hamilton Avenue
San Jose, California 95125
Tel:
(408) 376-7400
(Name, address, and telephone number of person authorized to receive notices
and communications on behalf of filing persons)
with copies to:
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Keith Flaum, Esq.
Cooley Godward Kronish LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA
94306-2155
Tel: (650) 843-5000
Fax: (650) 849-7400
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Francis Wheeler, Esq.
Cooley Godward Kronish LLP
380 Interlocken Crescent, Suite 900
Broomfield, CO 80021-8023
Tel: (720)
566-4000
Fax: (720) 566-4099
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CALCULATION OF FILING FEE
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Transaction Valuation
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Amount of Filing Fee
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Not Applicable
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Not Applicable
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Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing
by registration statement number or the form or schedule and the date of its filing.
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x
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Check the box if the filing relates to preliminary communications made before the commencement of a tender offer.
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Check the appropriate boxes below to designate any transactions to which the statement relates:
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x
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third-party tender offer subject to Rule 14d-1.
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issuer tender offer subject to Rule 13e-4.
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going-private transaction subject to Rule 13e-3.
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amendment to Schedule 13D under Rule 13d-2.
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Check the following box if
the filing is a final amendment reporting the results of the tender offer:
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This Schedule TO contains the following exhibits:
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Exhibit A
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Presentation slides used for eBay Inc. investor/analyst conference call held on April 16, 2009
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Exhibit B
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Transcript of portions of eBay Inc. investor/analyst conference call held on April 16, 2009
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Exhibit C
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Presentation slides used at eBay Inc., Internet Auction Co. and Gmarket Inc. press conference held on April 16, 2009 in Seoul, Korea
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Exhibit D
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Email from John Donahoe, President and Chief Executive Officer of eBay Inc., to eBay employees
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Exhibit E
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Letter from Jay Lee, Corporate Senior Vice President, eBay Inc. & General Manager, eBay Asia Pacific, to eBay Marketplaces Asia employees
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Exhibit F
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Email from Joo Man Park, Chief Executive Officer of Internet Auction Co., to Internet Auction Co. employees
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Exhibit G
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Blog post written by Richard Brewer-Hay on eBay Ink blog, posted April 15, 2009
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Exhibit H
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Post on eBay iWeb intranet
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Exhibit I
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eBay Marketplaces Korea fact sheet
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Exhibit J
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Corporate biographies of Jay Lee (Corporate Senior Vice President, eBay Inc. & General Manager, eBay Asia Pacific), Joo Man Park (Chief Executive Officer, Internet Auction Co.) and Young Bae
Ku (Chief Executive Officer, Representative Director, Gmarket Inc.)
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Exhibit A
®
Gmarket & Skype
April 16, 2009
Investor/ Analyst Call
® Important
Information
This presentation contains forward-looking statements, including statements regarding Skype, eBay, IAC and
Gmarket, that involverisks and uncertainties, and actual results could differ materially from those discussed. Forward-looking statements with respect to eBays agreement to acquire Gmarket include, but are not limited to, the possibility that
the transaction may not close; risks associated with eBays international operations (including foreign currency exchange rate fluctuations and regulatory, political and economic conditions in Korea and other areas of Asia); the reaction of
users and suppliers of Gmarkets and IACs services to the transaction, the future growth of Gmarkets and IACs services; the reaction of competitors to the transaction; the contemplated integration of the employees and certain
systems of each company, and the possibility that integration following the transaction may be more difficult than expected; and the possibility that the expected benefits of the transaction may not materialize to the extent expected or at all.
Forward-looking statements with respect to Skype include, but are not limited to, statements regarding the planned IPO, the anticipated continuation of Skypes growth, Skypes anticipated effective competition in its markets, and
Skypes anticipated future revenues and other elements of financial and business performance. These forward-looking statements involve risks and uncertainties, and actual results could differ materially from those projected in the
forward-looking statements as a result of certain risk factors, including but not limited to: the impact of the credit crisis, economic downturn and other changes in political, business and economic conditions; the regulatory, intellectual property,
competitive and other risks specific to Skype; the inability to manage successfully and complete the IPO, including the ability to retain and attract key employees, the risk that the IPO of Skype may not occur in its expected timeframe or at all,
and other events and other important factors disclosed previously and from time to time in eBays filings with the U.S. Securities and Exchange Commission. More information about factors that could affect eBays operating results can be
found in the companys most recent annual report on its Form 10-K and its subsequent quarterly reports on Form 10-Q (available at http://investor.ebay.com or at the SECs website at www.sec.gov.). All forward-looking statements are based
on information available to eBay on the date hereof, and eBay assumes no obligation to update such statements.
This
presentation is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell shares or American Depositary Shares of Gmarket. At the time the offer is commenced, eBay and its acquisition subsidiary will
file tender offer materials with the SEC and Gmarket will file a Solicitation/Recommendation Statement with respect to the offer. The tender offer materials (including an Offer to Purchase, a related Letter of Transmittal and certain other offer
documents) and the Solicitation/Recommendation Statement will contain important information, which should be read carefully before any decision is made with respect to the tender offer. The Offer to Purchase, the related Letter of Transmittal and
certain other offer documents, as well as the Solicitation/Recommendation Statement, will be made available to all holders of shares or American Depositary Shares of Gmarket at no expense to them at the SECs web site at www.sec.gov. Free
copies of these documents will be made available upon request by mail to eBay Inc., 2145 Hamilton Avenue, San Jose, CA 95125, Attention: Investor Relations or to Gmarket Inc., 9th Floor, LIG Tower, 649-11 Yeoksam-Dong, Gangnam-Gu, Seoul 135-912,
Korea, Attention: Investor Relations.
In addition to the Offer to Purchase, the related Letter of Transmittal and certain
other offer documents, as well as the Solicitation/Recommendation Statement, Gmarket and eBay file annual and special reports and other information with the SEC. You may read and copy any reports or other information filed by eBay or Gmarket at the
SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the public reference room. eBays and Gmarkets filings with the SEC are also available to the
public from commercial document-retrieval services and at the website maintained by the SEC at http://wwvw.sec.gov.
eBay
Inc.Proprietary & Confidential 3
M&A: Using financial strength to extend our reach
Strengthen geographic footprint
Extend formats / products
Acquire key technologies
eBay
Inc.Proprietary & Confidential
Recent announcements
Announced intent to IPO Skype in first half of 2010
Great stand-alone business with
strong user metrics
Limited synergies between Marketplaces & PayPal
Separation will allow Skype to achieve full potential
Acquire Gmarket
Acquiring leading online marketplace in Korea
Solidifies leadership position in Korea
Strengthens platform for further expansion into Asia
~$1.2B
cash tender offer (assuming 100% outstanding shares are tendered)
Focusing the portfolio / Strengthening the portfolio
Separate Skype
eBay
Inc.Proprietary & Confidential
Gmarket Deal Overview
Transaction StructureTender offer to acquire Gmarket (NASDAQ: GMKT). Signed agreement to tender with Interpark, Chairman Lee, Yahoo!, and Young Bae Ku representing ~67% ownership (including exchange of IAC shares)
Purchase price$24 per share (~$ 1.2B assuming 100% of all outstanding shares are tendered)
Timing of CloseLate Q2 2009
2009 Financial Impact to eBayRevenues$120 -$130M
Non-GAAP* EPS Modestly accretive GAAP EPSDilutive by $0.04
to $0.05
(from close to end of year)
* For information on how non-GAAP financial measures are calculated, please refer to eBays fourth quarter and full year earnings release issued on January 23, 2009.
eBay
Inc.Proprietary & Confidential
About Gmarket
Gmarkets Revenue and Margin
(Unit:: million ?, % )
Rev.
GAAP OP
(%)
Koreas leading online marketplace
GMV ?4.0T ($ 3.2B)
Revenue ?279B($ 221M)
17.8% GAAP Operating Margin
Compelling user experience
Strong merchandising
Optimized tools for high volume sellers
Strong target market
New, in-season product focus
Fashion oriented categories, ~97% fixed price
Strong management team
Current Ownership structure
Insider 54%, Institutional 37%, Other 9%
05010015020025030020052006200720080%5%10%15%20%
eBay
Inc.Proprietary & Confidential
Strategic Rationale
Korea
an attractive market for additional investment 6th largest eCommerce market in the world
~15% eCommerce growth in 08 and estimated 13% CAGR through 2013 (1)
Online retail
expected to gain share
~10% of total retail in 2010 (2)
?Combined entity Gmarket/ IAC will solidify leadership
position Complementary buyer segments; IAC strong in male 30s and Gmarket strong
in female 20s
demographics
?Significant and attainable synergies
?Enables longer-term expansion into other Asian markets
(2)
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Samsung economic research institutes 2008 Jan
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eBay
Inc.Proprietary & Confidential
More powerful together
Complementary strengths
Leading brand (#1)
User interface. Strong focus
on merchandising
Leader in female (20s)
segment
Strength in fashion
categories
Innovative marketing
(online, offline & couponing)
Strong brand (#2)
User interface
primary
focus on search & browsing
Leader in +30s user
segment
Strength in computers,
electronics & sports
categories
w/ synergistic
opportunities
®
eBay
Inc.Proprietary & Confidential
With synergistic opportunities
9
Operating
expenses
(customer support, g&a, site ops, pd)
Marketing
Transaction processing
Sources of
Operational Synergies
Consolidate agreements
renegotiate by leveraging volume
Efficiencies in online and offline marketing,
including couponing
Eliminate redundancies
automation
Two strong brands w/ significant synergies
eBay
Inc.Proprietary & Confidential
Efficient capital allocation
10
At
year end 2008, ~90% of our
cash balance* was held offshore
Significant portion of our free cash
flow is generated internationally
Strong cash position and cash generation
offshore
will fund the acquisition 0.32.9Q4 08 Ending
3.2
Cash
balance*
(in $billions)
*
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Cash balance includes cash and cash equivalents
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International
US
eBay
Inc.Proprietary & Confidential
Summary
11
Extending
our leadership globally and positioning our company for growth
Separating Skype enables us to focus on our core
growth portfolio, while maximizing its full potential and value
Gmarket extends our leadership position in Korea and further
strengthens our Marketplaces business
Exhibit B
Transcript of portions of eBay Inc. investor/analyst call held on
April 16, 2009
Moderator: Mark Rowen
Operator: Good day everyone and welcome to todays eBay conference call. Todays conference is being recorded.
At this
time, Id like to turn the call over to Mr. Mark Rowen, Vice President of Investor Relations. Please go ahead, sir.
Mark Rowen: Thank you. Good morning; I thank you for joining us and welcome to our conference call relating to the announcements we recently made.
Joining me today on the call are John Donahoe, our Chief Executive Officer and Bob Swan, our Chief Financial Officer.
Were providing a slide presentation to accompany the commentary during the call. This conference call is also being broadcast on the Internet and both the presentation and call are available through the investor
relations section of the eBay Web site at investor.ebay.com.
Before we begin, Id like to remind you that during the course of this
conference call we may discus some non-GAAP measures in talking about our companys performance. In addition, management may make forward-looking statements relating to our future performance that are
based on our current expectations, forecasts and assumptions and involve risks and uncertainties including those related to the companys ability to
grow its businesses, user base and activity.
Our actual results may differ materially from those discussed in this call for a variety of
reasons including but not limited to our increasing need to grow revenues from existing users and establish markets, an increasingly competitive environment for our businesses, the complexity of managing a growing company with the broad range of
businesses our need to manage regulatory, tax, IP and litigation risks including risks specific to PayPal and the financial industry and risks specific to Skypes technology and the VoIP industry. Our need to upgrade our technology and customer
service infrastructure to accommodate growth at reasonable costs while adding new features and maintaining site stability. Foreign exchange rate fluctuations, changes in political, business, and economic conditions, our ability to profitability
expand our business model to new types of merchandise and sellers and the impact and integration of recent and future acquisitions.
You
can find more information about factors that could affect our operating results in our most recent annual report on Form 10-K and our subsequent quarterly reports on Form 10-K. You should not unduly rely on any forward-looking statements which are
based on information available to us on the date here of and we assume no obligation to update such statements.
And now, let me turn the
call over to John.
John Donahoe: Thank you, Mark and good morning everyone. Weve announced two important decisions
this week that focus and strengthen our company and deliver value to our shareholders.
[portions omitted]
Secondly, were now announcing today that were acquiring Gmarket, Koreas largest online
marketplace and combining it with our existing Korean marketplace Internet Auction Company or IAC. Both are strong fixed price marketplaces and this strategic acquisition significantly strengthens our position in Korea and our core marketplace
business.
Now, these moves are consistent with the growth strategy we outlined in March at our analyst day. And Id like to just to
take a brief moment to recap what we said that day. Our companys fundamental is connecting buyers and sellers and doing so in innovative ways. Its how we have grown and will continue to grow this company over the long-term.
As I said, we have two strong dynamic core growth engines e-commerce and online payments. Were positioning our company to compete and win in
these core businesses which involve building, deploying and leveraging a wide range of e-commerce platforms that are focused on connecting buyers and sellers.
Now, the core eBay business is focusing on where we can win and were strengthening the ways in which we compete in e-commerce. Well continue to be one of the winners in a changing e-commerce landscape.
Its not a winner take all. Similar to offline retail e-commerce will have multiple winners each focused on target segments. And Gmarket adds to our e-commerce capabilities in Korea and in broader Asia.
[portions omitted]
Now, let me turn to Gmarket. As you know weve been in Korea for a long time, more than 7 years.
And we built a leading position with our successful IAC business. Weve also long admired Gmarket, todays market leaders, which is led by Mr. Ku, President and CEO. Now, Mr. Ku will continue to lead Gmarket as part of the
combined organization. And Gmarket is an innovative and competitive platform and one that is very complimentary to our current business. The combination of Gmarket and IAC gives us an extremely strong leadership position and team in Korea, which is
one of the worlds largest and most dynamic and innovative e-commerce markets.
There are strong synergies between IAC and Gmarket
enabling us to offer more opportunities for sellers in Korea and better serve complementary consumer segments. While well operate Gmarket and IAC as separate sites there are significant opportunities to free up resources by eliminating back
office redundancies. Gmarket significantly strengthens our e-commerce portfolio in Korea and gives us added capabilities with a proven platform to expand into other Asian markets over the longer term.
Through the combined business, eBay will be able to offer benefits for both Gmarket and IAC sellers such as tools for quick simultaneous listing across
both platforms and enhanced experienced for buyers to improve selection, incentives and loyalty programs. The combination also provides necessary support for Korean sellers to access eBays global network and sell to buyers in other countries.
We believe that the immediate value created in Korea coupled with the longer term opportunities in Asia make this a very attractive
acquisition and represents a strategic use of our cash that strongly supports growth in our business. Asia is an increasingly important region for eBay and this gives us a more powerful competitive foothold for longer term growth.
So were strengthening our portfolio to compete and win in e-commerce and online payments. And were taking a disciplined approach to our use
of capital. We believe that separating Skype
is the right answer to focus our company and were excited about adding Gmarket to the eBay portfolio to strengthen one of our two core businesses.
Now before taking questions, let me turn it over to Bob who will provide you with more specifics.
Bob Swan: Thank you, John and good morning everyone. Ill spend the next few minutes discussing the financial context of the
announcements weve made in the past few days.
One of the advantages of our strong financial position in these turbulent times is
that were able to capitalize on opportunities to strengthen our businesses. As we discussed last month at our analyst day, our M&A strategy is three-fold. First, to expand or strengthen our geographic footprint which is what the Gmarket
acquisition is meant to accomplish. Secondly, to expand our products or formats for bringing buyers and sellers together and third, to acquire key technologies that enable our businesses.
[portions omitted]
Now, let me turn to
Gmarket. The combination of IAC, our Korean marketplace with Gmarket gives us an exceptionally strong leadership position in Korean online e-commerce and strengthens our platform for further expansion in Asia. Im excited about this deal.
As you know in May 2008, we sought preliminary approval to combine these companies from Koreas FTC. And we received preliminary
approval in the fall and we began negotiating this deal
in earnest. Im confident these combined businesses will generate significant value for our shareholders.
The transaction is a cash tender offer for $24 per share for all out standing share for all out standing shares of Gmarket a 20% premium to
yesterdays closing price for a total purchase price of up to $1.2 billion assuming all shares are tendered. We signed agreements to tender with (Interpark), Chairman Lee, Yahoo! and Mr. Ku which will represent approximately 67% ownership
of Gmarket including the exchange of IAC shares into Gmarket.
We expect to close the deal late in the second quarter and will finance the
acquisition with cash held overseas. For 2009, this deal will approximately 120 to 130 million to eBays top line and will be modestly accretive to EPS on a non-GAAP basis. On a GAAP basis, we expect it to be dilutive to EPS by 4 to 5
cents.
Gmarket is a leader in online commerce in Korea with strong revenue growth and expanding profit margins. In 2008, the company
reported revenues of 221 million and operating margins of approximately 18% up 6 points from the prior year. As John indicated, Gmarket has a strong management team and provide a compelling user and product experience.
The strategic rational for this deal is sound. Korea is an attractive market for additional investment. It is the sixth largest e-commerce market in the
world with future growth rates estimated to be in the low double digits, as the online channel continues to gain share of retail.
Asia is
an increasingly important region for eBay and this more gives us a powerful competitive foothold for the long-term growth. Gmarket is a business that is complementary to our IAC business in Korea. The combined deal enables us to offer more
opportunities to sellers while better serving the complementary buyer segments in new and exciting ways.
From the valuation perspective, the fundamentals of Gmarket are strong and the combination of the two
businesses will provide opportunities for capturing significant synergies. Our degree of confidence in achieving these synergies is high and we believe the acquisition will deliver a strong return on capital to our shareholders.
Sources of operational synergies will be in the form of improved transaction processing costs, more efficient online and offline marketing and lower
operating expense through the elimination of backend redundancies. As I mentioned previously, we will finance the acquisition with international cash. A significant portion of our cash balance is off shore and a significant portion of our free cash
flow is generated offshore as well. At the end of 2008, we held $2.9 billion of our $3.2 billion cash outside of the U.S. In addition, we expect to generate a significant portion of our future free cash flows offshore.
In closing, were excited about the strategic decisions weve announced this week which will serve to focus and strengthen our portfolio. Our
decision to IPO Skype in the first half of 2010 will enable us to maximize its full potential while focusing on our two core growth businesses, eBay and PayPal. The acquisition of Gmarket extends our leadership position in Korea, and further
strengthens our marketplaces business. We believe the combination will serve our community of buyers and sellers with enhanced levels of service.
With that, we will open up for questions. Operator?
Operator: Thank you. [portions omitted]
Well take our first question from Doug Anmuth with Barclays Capital.
Doug Anmuth: Thanks for taking my questions. Two quick ones. First, you talked about the potential for further expansion in Asia. Can
you talk about whether you do have any plans currently to reenter China or Japan?
[portions omitted]
John Donahoe: Thanks, Doug. Let me Ill take each of those. In terms of expansion into Asia, we think Gmarkets
platform offers nice potential to expand into other countries in Asia. In fact, Mr. Ku, who is the executive that is really big on building Gmarket, has a strong interest in driving that initiative and has some early, early work that hes
done in both Japan and in Singapore.
But quite clearly, our focus is going to be on achieving the value of in Korea and solidifying our
leadership position over the next 6 to 12 months. And then well be looking at ways to expand in other parts of Asia probably starting with Japan and other parts. I think China were going to continue to push ahead with our current joint
venture.
And in terms of the and continue in China with your strong cross border business which is continuing to grow both in eBay
and PayPal. Its just phenomenal what that business continues to do.
[portions omitted]
Mark Rowen: Next slide, please.
Doug Anmuth: Thank you.
Operator: Well go next to Mark Mahaney with Citi.
Mark Mahaney: Thanks. Two quick
questions. The PayPal opportunity because of this acquisition is there any data points you have or anything you can disclose about how well PayPal is doing in that market? Is there any PayPal usage on Gmarket? Is that a revenue potential
revenue opportunity?
And then in terms of expanding beyond Korea, maybe as a data point anything you have on how much of the activity on
IAC or in Gmarket is cross border, is actually currently all ready occurring outside of Korea? Thank you.
John Donahoe:
Thanks, Mark. In terms of the PayPal opportunity, I would say yes in the medium term but not in the short term. As you probably know, Korea is a completely escrow market. Its one of the reasons that e-commerce has taken off so powerfully in
Korea because theres no problems with trust whatsoever because of the escrow payment system.
Now, PayPal is not very penetrated in
Korea except for cross border. And PayPal is working on product capabilities that, in essence, allow it to offer an escrow capability which we think is going to be required in Asia over time. So we see very good growth opportunity for PayPal in the
medium term but theres not going to be anything that will immediately take place because both for IAC and for Gmarket most all of the payments are through escrow.
Now, we see over time an actual opportunity to achieve synergies once we can integrate PayPal because it
will reduce the credit card piece that both businesses pay.
In terms of cross border frankly theres been minimal thus far because of
the language barrier. Most Korean sellers just list in Korean on their on IAC and Gmarket. And so theres not a whole lot thats been done thus far. That said, we see now an opportunity. We have enough scale in Korea now where we
can invest in essence language translation capabilities so that we can bring the very good inventory that exists in Korea exposure to our worldwide network. And thats something that I know that the team at Gmarket and at IAC are interested in
and something well be pursuing that we think is an opportunity.
Mark Mahaney: Thank you, John.
Bob Swan: And Mark, I would just say that as we pursue opportunities for more cross border trade from the two platforms thats
where PayPal is uniquely positioned to help accelerate the growth with a safe secure way to pay with PayPal and cross border. Thats how weve grown our China cross border as well.
John Donahoe: And were just seeing the benefits of these low cost Asian sourcing. I mean the China business just continues to have
a strong cross border dimension and we want to add to that throughout Southeast Asia and Korea.
Mark Rowen: Next slide,
please.
Operator: Well go next to James Mitchell, Goldman Sachs.
James Mitchell: Thank you very much for taking my question. Can you talk about the implicit valuation being placed on the Internet
auction in the transaction? It looks like its 6 or $700 million. And
also I think in the past since that auction has been very low margin at least on Korean GAAP could you talk about the opportunity to boost margins in that
business?
Bob Swan: Yes, let me answer the second one first, James. Theres obviously some fairly significantly
differences between Korean GAAP and U.S. GAAP. And as a result our margins of the stated margins in our disclosures in Korea had been relatively low. On a U.S. GAAP basis theyre higher than the local disclosures.
Secondly, as I mentioned in the prepared comments, we do see opportunities for significant synergies both through scale, both through back office, back
office redundancies. But also through understanding and leveraging each others cost structure to see where the best practices lie in an effort to drive the combined businesses, margins, margins up over time. So we do see the opportunities to
do that.
In terms of the value on the IAC entity, in essence, the transaction is kind of a simultaneous three stage transaction. And stage
1 is the existing shareholders agreeing to tender including (Interpark), Chairman Lee, Yahoo! and Mr. Ku. Stage 2 is a merger of IAC and the Gmarket. And through the nature of that gross Gmarket will acquire the shares of IAC at a
Gmarket valuation of $24 per share. And that will increase our equity ownership in Gmarket by roughly 15%. And the third stage is obviously then the remaining tender for all out standing shares.
James Mitchell: So Gmarket buying out IAC at $24 per share would imply somewhere around a 5 or $600 million valuation on IAC?
Bob Swan: Your math is in the ballpark.
James Mitchell: OK. Thank you.
Mark Rowen: Next slide, please.
Operator: Well go next to Crista Quarles with Thomas Weisel Partners.
Crista Quarles: Yes, I just wanted to follow up a little bit on the margin stuff. Over time you know its our understanding that
they I guess as you look at your long-term margin profile for the core marketplace at 35 to 45%. Does that sort of sway you in one direction or another in terms of, as you think about, putting the best practices of Gmarket into the eBay
platform if that changes that at all. And then I have a follow up.
Bob Swan: Yes, first of all, Crista, were
looking at the margins in Korea that had historically been lower. We believe by combining these lower than kind of the overall marketplaces segment margins. We believe by combining these two businesses, we will increase margins but still
expect that margins in the Korea market itself will be relatively lower than overall margins in the portfolio as a whole.
To the extent
that the combined business enables us to grow faster and grow margin dollars faster in other regions of the world, we obviously will make that trade off to accelerate growth even if it means margin rates are lower over time.
Crista Quarles: And does this also mean that you know kind of moving towards more of a controlled marketplace the way that sort of
Amazons third party business works and how we perceive Gmarkets business ultimately works?
John Donahoe:
Im not exactly sure what you mean by controlled marketplace. I think the you know Gmarket and IAC are very similar marketplaces. So its a marketplace were quite familiar with. And what is different about Korea, really are
two things. One there its virtually 100% fixed price and new items and two the escrow product which adds trust to their system. So well leverage
what we can learn from that. Weve learned a lot about fixed price marketplace through our ownership of IAC. And well leverage that globally.
As is said in our analyst day, I think our ambition is not to copy anybody. Our ambition is to leverage the unique assets globally that
weve got and win in the secondary market, which we think requires a different kind of marketplace, one thats got both the capacity to handle use items, the capacity to handle, new items, but may be opened or new that are one life cycle
or one product life cycle out of retail as well as the latest items. And thats going to require both an auction format and a fixed price format. Thats going to require a broader set of sellers, large and small than more narrow
marketplaces or more retail marketplaces.
And we think our the Gmarket capabilities and our IAC capabilities are one piece of
helping us build that over time.
Crista Quarles: Great. Thanks.
Mark Rowen: Next slide, please.
Operator: Well go next to Steve Weinstein with Pacific Crest.
Steve Weinstein:
Great, thank you. When you initially were seeking permission to start talks with Gmarket you had to I guess accept certain concessions regarding how you would be pricing if you took on this kind of market power. Has there been any change to do that?
Or are you expecting any newer kind of regulations as a result of this?
Bob Swan: Steve as you know weve been
working with the KFTC for a while now and continue work with them with this announcement and expect that well get while we have preliminary
clearance expect well have final clearance in relatively short order and dont anticipate any changes in terms of conditionality from the
preliminary ruling.
Steve Weinstein: Great. Thank you.
John Donahoe: And valuation is justified on the cost synergies. So we had agreed we wont raise fees to sellers and we reaffirm
that. We think the value in this deal is to achieve the cost synergies and we think we can get enhanced growth by cross merchandising across these two platforms. Whats interesting about these two platforms is they have very complementary
focus. So IAC is quite strong on males over 30 and in the kind of products they buy which tend to be more consumer electronics.
Gmarket is
very strong in the fastest growing segment in Korea which is young females. In fact, 78% of the women in Korea in their 20s visit Gmarket once a month. And thus Gmarket is also strong then in the products they tend to buy which are more fashion
oriented, clothing, shoes and accessories. And we think theres a very nice opportunity to continue to penetrate these two complementary segments but begin to cross merchandise. So thats where we see a lot of the value coming.
Mark Rowen: Next slide, please.
Operator: Well go next to Heath Terry, FBR.
Heath Terry: Great. Thank you. Im
just wondering first if theres any intention or sense at this point of maintaining any ownership post the Skype IPO. And then also you look at the Gmarket technology versus where eBays platform is whether there are any kind of longer
term advantages to this that benefits that would actually benefit the core eBay marketplaces business.
[portions omitted]
John Donahoe: And Heath in terms of Gmarkets platform, as I said earlier its what we really like about it is
its been built such that it can expand into other countries across Asia so both the language capabilities and the flexibility to enable it to roll out into Japan or roll out into other countries in Southeast Asia. And the part thats in
Korea is frankly very similar to our IAC platform. Both are geared to succeeding in Korea and have really out standing capabilities in terms of loyalty and merchandising and incentives. Some of the best loyalty programs around are in Korea. But what
we really like about the Gmarket platform is its potential to expand into other regions of the world for a fixed price offering.
Heath Terry: Great. Thank you.
Mark Rowen: Next slide, please.
[portions omitted]
Mark Rowen: Next slide, please. Operator, we have time for one last question.
Operator: OK. Well take our final question from Jeffrey Lindsay with Sanford Bernstein.
Jeffrey Lindsay: Thank you. Ive got to ask two things. Do your agreements with your current joint venture partners in the Asia
Pacific region do they present any obstacles to operating in China and Japan with Gmarket?
[portions omitted]
John Donahoe: Why dont I take the first? And Bob, you take the second. In terms of joint venture partners and our current
arrangements we have a good joint venture with (Tom) in China and will continue with that joint venture and continue to revisit it on an ongoing basis. And then we have arrangements in Japan with Yahoo! Japan and we will those dont
prevent us from pursuing what we any path with Gmarket in Japan.
[portions omitted]
Jeffrey Lindsay: Great. Thank you.
Mark Rowen: All right. Thank you for joining us. And we will be back with you next week on our earnings call.
Male: Thanks, everyone.
Male: Thanks.
Operator: Ladies and gentlemen, that does conclude todays conference.
We appreciate your participation. You may disconnect at this time.
END
Press
Conference: eBay , Gmarket, IAC
Korea as Ecommerce Platform of Asia
April 2009
Exhibit C
|
eBay
Inc. confidential
Important Information
This presentation contains forward-looking statements, including statements regarding eBay, IAC and
Gmarket, that involve
risks and uncertainties, and actual results could differ materially from
those discussed. Factors that could cause or contribute to
such differences include, but are
not limited to, the possibility that the transaction may not close; risks associated with eBay's
international operations (including foreign currency exchange rate fluctuations and regulatory, political
and economic conditions in
Korea and other areas of Asia); the reaction of users and suppliers
of Gmarkets and IACs services to the transaction; the future
growth of
Gmarkets and IACs services; the reaction of competitors to the transaction; the contemplated integration of the
employees certain systems of each company, and the possibility that integration following the transaction
may be more difficult
than expected; and the possibility that the expected benefits of the
acquisition of Gmarket may not materialize to the extent
expected or at all. More information
about factors that could affect eBays operating results can be found in the companys most
recent annual report on its Form 10-K and its subsequent quarterly reports on Form 10-Q (available
at http://investor.ebay.com or
at the SECs website at www.sec.gov.). All
forward-looking statements are based on information available to eBay on the date
hereof,
and eBay assumes no obligation to update such statements.
This presentation is for informational purposes only and is neither an offer to purchase nor a solicitation
of an offer to sell shares
or American Depositary Shares of Gmarket. At the time the
offer is commenced, eBay and its acquisition subsidiary will file
tender offer materials with
the U.S. Securities and Exchange Commission (the SEC) and Gmarket will file a
Solicitation/Recommendation Statement with respect to the offer. The tender offer materials (including an
Offer to Purchase, a
related Letter of Transmittal and certain other offer documents) and the
Solicitation/Recommendation Statement will contain
important information, which should be read
carefully before any decision is made with respect to the tender offer. The Offer to
Purchase,
the related Letter of Transmittal and certain other offer documents, as well as the Solicitation/Recommendation
Statement, will be made available to all holders of shares or American Depositary Shares of Gmarket at no
expense to them at
the SECs web site at www.sec.gov. Free copies of these documents
will be made available upon request by mail to eBay Inc.,
2145 Hamilton Avenue, San Jose,
CA 95125, Attention: Investor Relations or to Gmarket Inc., 9th Floor, LIG Tower, 649-11
Yeoksam-Dong, Gangnam-Gu, Seoul 135-912, Korea, Attention: Investor Relations.
In addition to the Offer to Purchase, the related Letter of Transmittal and certain other offer documents,
as well as the
Solicitation/Recommendation Statement, Gmarket and eBay file annual and special
reports and other information with the SEC.
You may read and copy any reports or other
information filed by eBay or Gmarket at the SEC public reference room at 100 F
Street, N.E.,
Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the public
reference room. eBays and Gmarkets filings with the SEC are also available to the public
from commercial document-retrieval
services and at the website maintained by the SEC at
http://wwvw.sec.gov.
|
3
Overview of Acquisition
Stakeholder
Proportion(%)
# of Shares
Interpark
Ki
Hyung
Lee, Chairman of Interpark
29.01
5.20
14,599,900
2,615,500
Shareholders (including American Depository Shares listed on NASDAQ)
Yahoo! Korea
56.84
8.95
28,610,690
4,505,650
Total
100.00
50,331,740
History
-
KFTC granted
preliminary
conditional
approval
for
eBay
to
purchase
up
to
100%
of
Gmarket
shares
(September
2008)
-
eBay
signed
definitive
agreements
regarding
eBays
acquisition
of
Gmarket
shares
through
a
cash
tender
offer
and
the
combination of the Gmarket
and
IAC businesses (April 2009)
Summary of Terms
-
eBay
has
agreed
to
acquire
up
to
100%
of
outstanding
Gmarket
shares
through
a
cash
tender
offer
of
U$
24.00
per
share
-
Members
of
Grocers
management
and
other
investors
including
Interpark
and
Ki
Hyung
Lee,
Chairman
of
Interpark,
holding
52%
of
the
outstanding
Gmarket
shares
have
agreed
to
tender
their
Gmarket
shares
into
the
tender
offer
-
IAC and Gmarket
businesses will be combined following the completion of the tender offer
Gmarket
Stakeholder
Structure
|
4
Korea: A Strong Platform for E-commerce Expansion Throughout Asia
Korea has a significant e-commerce market with consumers of high purchasing
power
As of
2008,
the
Korean
market
is
the
6
largest
after
US,
DE,
UK,
CH
and
JP
(1)
A Korean Internet user buys U$ 954 worth of goods per year thru e-commerce, highest
among
northeast Asian nations
(2)
-
Korea (U$954)> Japan (U$533)> China (U$323)
The acquisition is a compelling investment for eBay to build a platform for Asian market
growth
Gmarket
is posting fast growth with innovative biz models and services
-
Koreas leading online marketplace with KRW 3.9 trillion in GMV in 2008
-
KRW 279 billion in revenue in 2008
Gmarket
has laid a foundation for sustainable growth
The acquisition demonstrates eBays commitment to growing Asian market
The acquisition is a strong sign that shows eBays long-term strategy in
Asia
The successful Korean e-commerce platform will lay the foundation for eBays
expansion to Asia-
Pacific and other regions
(1) IDC Marketplace Model, January 2009. Excluding Travel & Reservation, 21%
including Travel & Reservation
(2) IDC Marketplace Model, January 2009,
ComScore, December 2008
1
2
3
th
|
5
Combining
IAC
and
Gmarket
Will
Enhance
Customer
Value
5
Improve finding for buyers
though best practice sharing
Gain greater business value
by streamlining operations,
collaborate on marketing efforts
and competitive strategies
-
Korean sellers will have more access
to world wide buyers with eBays
Cross Border Trade Program
-
Expand to global market leveraging
Gmarket/IAC
platform
Provide buyers with
more selection
and better e-commerce prices
Expand sales opportunity
by exploring new businesses
with respective
business strengths
|
6
6
Presence
in
39
Markets
Europe
Austria
Belgium
France
Germany
Ireland
Italy
Netherlands
Poland
Spain
Switzerland
Sweden
UK
Americas
USA
Canada
Argentina*
Brazil*
Chile*
Colombia*
Costa Rica*
Dominicana*
Ecuador*
Mexico*
Panama*
Peru*
Uruguay*
Venezuela*
*MercadoLibre sites
Asia Pacific
Australia
China
Hong Kong
India
Japan**
Korea
Malaysia
New Zealand
Philippines
Singapore
Taiwan
Thailand**
Vietnam
Minority investment
eBay site
CBT Program
(1)
As Worlds Online Marketplace, eBay Has A Presence in 39 Markets with
More Than 86 Million Active Users
**Joint venture or commercial agreement
|
7
Global demand for Made in Korea
products
expected to grow, partly thanks to strong
dollar
CBT Support Program for Korean Sellers
Offer comprehensive CBT seller training
programs
Establish call center for CBT sellers
Partner with the Korean authorities to better
support sellers
Selectively support CBT listing fees
Partner with shipping agency for competitive
shipping price
Share best seller marketing practices to
attract buyers according to country attributes
CBT Program(2)
Provide Support for Korean Sellers Who Want to Participate in Cross
Border Trade through eBays Platform
|
8
Summary
Gmarket
and
IAC
will
8
Contribute to development of Korean ecommerce market
Continue to build a better, sophisticated online marketplace platform
Pursue sustainable, healthier growth of the entire ecommerce market
Keep offering innovative services with win-win-win
effect for company,
buyers and sellers
Expand to global market leveraging Gmarket/IAC platforms
Contribute to the Korean economy by supporting export of small-and-
medium sized businesses
|
Exhibit D
SUBJ: Expanding in Korea and Beyond
To all employees,
Today we announced a bold step in expanding our leadership position in Asia with our agreement to acquire Gmarket, Koreas largest online marketplace. Click
here
to read more on iWeb.
Through this acquisition, we will combine Gmarket with IAC, our existing marketplace business, to create an e-commerce powerhouse that will not only benefit consumers
and sellers in Korea, but will also help us strengthen our Asia business overall.
This is an incredible opportunity for us to do what we do best
connect buyers and sellers in new and innovative ways. Korea already has a thriving, dynamic Internet culture and is the sixth largest e-commerce market in the world. We know Gmarket and IAC together will only improve on this, generating significant
value to consumers and sellers in complementary markets. While IAC is strong among males in their 30s and is a leader in electronics and technology, Gmarket is popular with females in their 20s and is dominant in clothing and fashion.
Although Gmarket and IAC will maintain separate sites, we plan to combine operations and leverage best practices across both businesses. Again, consumers
and sellers win.
And thats what this is all about competing fiercely to win. With this acquisition, we gain a firm foothold to expand in one
of the most important e-commerce markets in the world. I want to thank everyone who was involved in making this deal happen, especially those people and teams in San Jose and in Korea who worked tirelessly to get the details right. I know
the combination will be great
I cant wait to see what IAC and Gmarket can do together.
Thanks,
John
This announcement is for informational purposes only and is neither
an offer to purchase nor a solicitation of an offer to sell shares or American Depositary Shares of Gmarket. At the time the offer is commenced, eBay and its acquisition subsidiary will file tender offer materials with the U.S. Securities and
Exchange Commission (the SEC) and Gmarket will file a Solicitation/Recommendation Statement with respect to the offer. The tender offer materials (including an Offer to Purchase, a related Letter of Transmittal and certain other offer
documents) and the Solicitation/Recommendation Statement will contain important information, which should be read carefully before any decision is made with respect to the tender offer. The Offer to Purchase, the related Letter of Transmittal and
certain other offer documents, as well as the Solicitation/Recommendation Statement, will be made available to all holders of shares or American Depositary Shares of Gmarket at no expense to them at the SECs web site at
www.sec.gov
.
Free copies of these documents will be made available upon request by mail to eBay Inc., 2145 Hamilton Avenue, San Jose, CA 95125, Attention: Investor Relations or to Gmarket Inc., 9th Floor, LIG Tower, 649-11 Yeoksam-Dong, Gangnam-Gu, Seoul
135-912, Korea, Attention: Investor Relations.
In addition to the Offer to Purchase, the related Letter of Transmittal and certain other offer documents,
as well as the Solicitation/Recommendation Statement, Gmarket and eBay file annual and special reports and other information with the SEC. You may read and copy any reports or other information filed by eBay or Gmarket at the SEC public reference
room at 100 F Street, N.E., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the public reference room. eBays and Gmarkets filings with the SEC are also available to the public from
commercial document-retrieval services and at the website maintained by the SEC at
http://www.sec.gov
.
Exhibit E
Acquiring Gmarket to drive complementary ecommerce growth in Korea
To All Marketplaces Asia Employees,
I am pleased to announce that we are
extending our reach in Korea with todays news that we have signed a definitive agreement to acquire Gmarket, Koreas largest online marketplace. Through this acquisition, we are bringing together two fantastic businesses and e-commerce
brands Gmarket and IAC. When combined, they will represent close to 10% of eBays global marketplace.
Combining Gmarket and IAC is a strategic
fit that will generate significant value to consumers and sellers in complementary markets. IAC is strong among males in their 30s while Gmarket is popular with females in their 20s. Our product categories are also complementary: IAC is a leader in
electronics and technology while Gmarket enjoys market leadership in clothing and fashion.
We are excited to have the talented and dedicated employees of
Gmarket join our committed and hard working team. Similar to IAC, the Gmarket team has built a performance-driven organization focused on superior execution and responsiveness to meeting buyer and seller needs. I look forward to working closely with
the Gmarket management team to further extend our leadership position.
The two companies will maintain separate websites. Domestically, we believe this
combination will lead to a marketplace that provides the best value and selection for Korean buyers and access to a larger user base for sellers.
A
combined Gmarket and IAC will also provide a firm foundation as we continue to expand our international footprint to other parts of Asia, and, in effect, a stronger, deeper platform for growth in other countries.
We are truly excited about this opportunity. eBay is about connecting buyers and sellers across the e-commerce format of their choice, and bringing Gmarket into the eBay
family will allow us to do just that.
Please join me in welcoming the Gmarket team.
Sincerely,
Jay
Additional Information
and Where to Find It
This announcement is for informational purposes only and is neither an offer to purchase nor a solicitation of an
offer to sell shares or American Depositary Shares of Gmarket. At the time the offer is commenced, eBay and its acquisition subsidiary will file tender offer materials with the U.S. Securities and Exchange Commission (the SEC) and
Gmarket will file a Solicitation/Recommendation Statement with respect to the offer. The tender offer materials (including an Offer to Purchase, a related Letter of Transmittal and certain other offer documents) and the Solicitation/Recommendation
Statement will contain important information, which should be read carefully before any decision is made with respect to the tender offer. The Offer to Purchase, the related Letter of Transmittal and certain other offer documents, as well as the
Solicitation/Recommendation Statement, will be made available to all holders of shares or American Depositary Shares of Gmarket at no expense to them at the SECs web site at www.sec.gov. Free copies of these documents will be made available
upon request by mail to eBay Inc., 2145 Hamilton Avenue, San Jose, CA 95125, Attention: Investor Relations or to Gmarket Inc., 9th Floor, LIG Tower, 649-11 Yeoksam-Dong, Gangnam-Gu, Seoul 135-912, Korea, Attention: Investor Relations.
In addition to the Offer to Purchase, the related Letter of Transmittal and certain other offer documents, as well as the Solicitation/Recommendation
Statement, Gmarket and eBay file annual and special reports and other information with the SEC. You may read and copy any reports or other information filed by eBay or Gmarket at the SEC public reference room at 100 F Street, N.E., Washington, D.C.
20549. Please call the Commission at 1-800-SEC-0330 for further information on the public reference room. eBays and Gmarkets filings with the SEC are also available to the public from commercial document-retrieval services and at the
website maintained by the SEC at http://www.sec.gov.
Exhibit F
Email to IAC Employees
Hi everyone,
We will
soon be announcing to the press that eBay Inc. and Gmarket today jointly announced a definitive agreement for eBay to purchase Gmarket. There is an All Hands meeting scheduled at 5:00 PM today where we can discuss this in more details and answer
your questions.
I firmly believe the combination of two leading online marketplaces, Gmarket and IAC, will set a significant milestone in the
nations history of ecommerce if we work together to create synergies with complimentary capabilities of both organizations,
Under the umbrella of
eBay, Gmarket and IAC will maintain separate brands and websites. Young Bae Ku, Gmarkets CEO will work together to drive our future growth and expectation. By the end of 2009, Mr. Ku and I will have built significant strategies regarding
business growth and organizational integration. From the year 2010, I and Mr. Ku will lead the domestic and international business, respectively, of the combined organization.
IAC introduced the business model of online marketplace to Korea after eBays acquisition, having grown into the nations representative ecommerce marketplace. Such an outstanding success would have been
impossible without your constant effort and dedication. I would like to take this opportunity to offer my deepest appreciation to all of you for staying focused and for all of your hard work.
IAC and Gmarket, once competitors, have become family under the eBay umbrella. From now on, our common goal should be to concentrate on offering our customers better
service and value.
All the best,
Jooman Park
Additional Information and Where to Find It
This email is for
informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell shares or American Depositary Shares of Gmarket. At the time the offer is commenced, eBay and its acquisition subsidiary will file tender offer
materials with the U.S. Securities and Exchange Commission (the SEC) and Gmarket will file a Solicitation/Recommendation Statement with respect to the offer. The tender offer materials (including an Offer to Purchase, a related Letter of
Transmittal and certain other offer documents) and the Solicitation/Recommendation Statement will contain important information, which should
be read carefully before any decision is made with respect to the tender offer. The Offer to Purchase, the related Letter of Transmittal and certain other
offer documents, as well as the Solicitation/Recommendation Statement, will be made available to all holders of shares or American Depositary Shares of Gmarket at no expense to them at the SECs web site at www.sec.gov. Free copies of these
documents will be made available upon request by mail to eBay Inc., 2145 Hamilton Avenue, San Jose, CA 95125, Attention: Investor Relations or to Gmarket Inc., 9th Floor, LIG Tower, 649-11 Yeoksam-Dong, Gangnam-Gu, Seoul 135-912, Korea, Attention:
Investor Relations.
In addition to the Offer to Purchase, the related Letter of Transmittal and certain other offer documents, as well as the
Solicitation/Recommendation Statement, Gmarket and eBay file annual and special reports and other information with the SEC. You may read and copy any reports or other information filed by eBay or Gmarket at the SEC public reference room at 100 F
Street, N.E., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the public reference room. eBays and Gmarkets filings with the SEC are also available to the public from commercial
document-retrieval services and at the website maintained by the SEC at http://www.sec.gov.
Exhibit G
BREAKING: eBay Expands in Asia:
Gmarket Purchase Announced
I first wrote about this story back in August and September of last year. You can see that initial post
here
.
According to a
press release
this evening,
eBay Inc.
has signed an agreement to expand its Asian operations to include
Gmarket
, Koreas leading online marketplace. The tender offer is at $24.00 per share for a
total purchase price of up to approximately $1.2 billion.
From the release:
At closing, eBay will hold at least 67 percent of Gmarket as a result of shares tendered pursuant to agreements to tender with members of management and other investors sufficient to satisfy the minimum tender
condition, as well as new shares issued by Gmarket in connection with the combination of Gmarket and eBays existing Korean marketplace business, Internet Auction Company. Shareholders that have signed agreements to tender include Interpark
Corporation and its chairman, Ki Hyung Lee, current holders of approximately 34 percent of the outstanding shares of Gmarket. eBay will combine Gmarkets operations with IAC, while maintaining separate sites.
When I first received a briefing on
Gmarket
last year, I admit I wasnt totally aware of the significance of the potential acquisition. However, according to
a recent
IDC
market update on Korea, it is the 6th largest ecommerce market in the world (behind the U.S., Germany, U.K., China and Japan).
The combination of
Gmarket
and
IAC
establishes an exceptionally strong leadership position for eBay in one of the worlds largest, most dynamic and innovative e-commerce markets, said John Donahoe, eBay
Inc.s president and chief executive officer. This deal creates strong operational synergies between the two market leaders, offers more opportunities for sellers and enhances our ability to better serve complementary consumer
segments.
As I reported last year, eBay entered the Korean market in 2001 when it became a majority shareholder in
Internet Auction Co.
(IAC)
, Koreas largest auction-based ecommerce site.
IAC
began service in April 1998 as the first Korean company to offer online trading, and has since grown to become one of the leading services of its kind in Korea. According to
the press release,
Gmarket
and
IAC
websites will remain separate but will operate within a single organization.
Gmarket
recorded $2.6
billion (3.98 trillion Korean won) in gross merchandise volume in 2008 and will become a part of the overall eBay Marketplaces business moving forward.
The full press release is
here
.
Cheers,
RBH
Additional
Information and Where to Find It
This announcement is for informational purposes only and is neither an offer to purchase nor a solicitation of an
offer to sell shares or American Depositary Shares of Gmarket. At the time the offer is commenced, eBay and its acquisition subsidiary will file tender offer materials with the U.S. Securities and Exchange Commission (the SEC) and
Gmarket will file a Solicitation/Recommendation Statement with respect to the offer. The tender offer materials (including an Offer to Purchase, a related Letter of Transmittal and certain other offer documents) and the Solicitation/Recommendation
Statement will contain important information, which should be read carefully before any decision is made with respect to the tender offer. The Offer to Purchase, the related Letter of Transmittal and certain other offer documents, as well as the
Solicitation/Recommendation Statement, will be made available to all holders of shares or American Depositary Shares of Gmarket at no expense to them at the SECs web site at
www.sec.gov.
Free copies of these documents will be made
available upon request by mail to eBay Inc., 2145 Hamilton Avenue, San Jose, CA 95125, Attention: Investor Relations or to Gmarket Inc., 9th Floor, LIG Tower, 649-11 Yeoksam-Dong, Gangnam-Gu, Seoul 135-912, Korea, Attention: Investor Relations.
In addition to the Offer to Purchase, the related Letter of Transmittal and certain other offer documents, as well as the Solicitation/Recommendation
Statement, Gmarket and eBay file annual and special reports and other information with the SEC. You may read and copy any reports or other information filed by eBay or Gmarket at the SEC public reference room at 100 F Street, N.E., Washington, D.C.
20549. Please call the Commission at 1-800-SEC-0330 for further information on the public reference room. eBays and Gmarkets filings with the SEC are also available to the public from commercial document-retrieval services and at the
website maintained by the SEC at
http://www.sec.gov
.
Exhibit H
(Call-out box)
Why It Matters
Gmarket
is a great business that complements eBays business model and will enable the company to provide buyers and sellers in the region with an improved experience.
The combination of Gmarket and eBays Internet Auction Co. enhance eBays long-term position in Asia and gives the company broader platform and operational capabilities.
eBay Expands Asian Operations Through Combination with Gmarket
Move
strengthens eBays e-commerce position in Korea, the worlds sixth largest marketplace
Editors Note: The following press release was
issued by eBay Inc. on April 15. Stay tuned to iWeb in the coming weeks for a follow-up story outlining eBays Marketplaces Asia strategy.
eBay Inc. and Gmarket Inc. today jointly announced a definitive agreement for eBay to combine Gmarket, Koreas leading e-commerce business, with eBays existing online marketplace in Korea. Under the terms of the agreement, eBay
will make a cash tender offer of $24.00 per share for all outstanding Gmarket common shares and American Depositary Shares, for a total purchase price of up to approximately $1.2 billion assuming all outstanding shares are tendered. As of
April 15, 2009, the consideration of $24.00 per share was equivalent to approximately 31,767 Korean won per share.
At closing, eBay will hold at
least 67 percent of Gmarket as a result of shares tendered pursuant to agreements to tender with members of management and other investors sufficient to satisfy the minimum tender condition, as well as new shares issued by Gmarket in connection with
the combination of Gmarket and eBays existing Korean marketplace business, Internet Auction Company. Shareholders that have signed agreements to tender include Interpark Corporation and its chairman, Ki Hyung Lee, current holders of
approximately 34 percent of the outstanding shares of Gmarket. eBay will combine Gmarkets operations with IAC, while maintaining separate sites.
The combination of Gmarket and IAC establishes an exceptionally strong leadership position for eBay in one of the worlds largest, most dynamic and innovative e-commerce markets, said John Donahoe, eBays president and
chief executive officer. This deal creates strong operational synergies between the two market leaders, offers more opportunities for sellers and enhances our ability to serve complementary consumer segments.
We welcome eBays investment in Gmarket, said Young Bae Ku, Gmarkets president and chief executive officer. This transaction will provide us
an excellent opportunity for our next growth stage in Korea and will also help accelerate our expansion strategies beyond Korea. We look forward to teaming up with eBays leadership both locally and globally to drive our future growth and
expansion.
The Board of Directors of Gmarket has voted unanimously to approve the transaction and recommends that Gmarket security holders accept
the offer. A special committee of Gmarkets independent directors recommended approval of the transaction to Gmarkets Board of Directors. The transaction, which is conditioned on the tender of a majority of the outstanding shares and
American Depositary Shares of Gmarket on a fully diluted basis, final Korean antitrust clearance and other customary closing conditions, is expected to close in the second quarter of 2009. Following completion of the tender offer, shares of Gmarket
not purchased by eBay will remain outstanding and will be delisted from The NASDAQ Stock Market. It is expected that there will not be an active trading market for outstanding Gmarket shares following completion of the offer.
With more than 86 million active users, eBay Marketplaces generated $60 billion of gross merchandise volume worldwide in 2008 and revenue of $5.6 billion. IAC
generated $2.2 billion of gross merchandise volume in 2008 and revenue of $161.2 million at an assumed exchange rate of 1262 KRW per USD. In 2008, Gmarket generated $3.2 billion of gross merchandise volume and revenue of $220.8 million at the same
assumed exchange rate.
Through the combined businesses, eBay will be able to offer benefits for Gmarket and IAC sellers, such as tools for
quick, simultaneous listings across both platforms, and enhanced experiences for buyers through improved selection, incentives and loyalty programs. eBay also expects the combination with Gmarket to provide a potential platform for further expansion
within Asia.
The combination also provides the necessary support for Korean sellers who seek access to eBays global network. By joining eBays
Cross Border Trade program, Korean small and medium sized businesses can export their products to buyers in foreign countries. Jooman Park, president of IAC and Young Bae Ku, president of Gmarket will jointly lead the combination of IAC and
Gmarket and will manage the integration of the two e-commerce companies.
Gmarkets focus on fashion-oriented categories and IACs focus on
computers, electronics and sports give the two platforms core strengths in complementary consumer segments. Females age 20-29, representing Koreas fastest-growing online segment, comprise more than 21 percent of Gmarkets consumer base.
Males age 30 and over comprise IACs biggest consumer segment. Korea is the worlds sixth-largest e-commerce market behind the United States, Germany, United Kingdom, China and Japan. eBay has more than seven years of experience in the
market, beginning with its acquisition of IAC in 2001.
eBay Inc. will host an investor conference call on Thursday, April 16 at 6 a.m. PDT to discuss
this announcement. A live webcast of the conference can be accessed through eBay Investor Relations Web site at http://investor.ebay.com. An archive of the webcast will be accessible through the same link.
Additional Information and Where to Find It
This announcement is for
informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell shares or American Depositary Shares of Gmarket. At the time the offer is commenced, eBay and its acquisition subsidiary will file tender offer
materials with the U.S. Securities and Exchange Commission (the SEC) and Gmarket will file a Solicitation/Recommendation Statement with respect to the offer. The tender offer materials (including an Offer to Purchase, a related Letter of
Transmittal and certain other offer documents) and the Solicitation/Recommendation Statement will contain important information, which should be read carefully before any decision is made with respect to the tender offer. The Offer to Purchase, the
related Letter of Transmittal and certain other offer documents, as well as the Solicitation/Recommendation Statement, will be made available to all holders of shares or American Depositary Shares of Gmarket at no expense to them at the SECs
web site at
www.sec.gov
. Free copies of these documents will be made available upon request by mail to eBay Inc., 2145 Hamilton Avenue, San Jose, CA 95125, Attention: Investor Relations or to Gmarket Inc., 9th Floor, LIG Tower, 649-11
Yeoksam-Dong, Gangnam-Gu, Seoul 135-912, Korea, Attention: Investor Relations.
In addition to the Offer to Purchase, the related Letter of Transmittal and
certain other offer documents, as well as the Solicitation/Recommendation Statement, Gmarket and eBay file annual and special reports and other information with the SEC. You may read and copy any reports or other information filed by eBay or Gmarket
at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the public reference room. eBays and Gmarkets filings with the SEC are also available
to the public from commercial document-retrieval services and at the website maintained by the SEC at
http://www.sec.gov
.
Author:
iWeb Staff
Posted on:
April 15, 2009
(Sidebar 1)
About Gmarket
Founded in
2000, Gmarket Inc. is a leading retail e-commerce marketplace in Korea, offering buyers a wide selection of products at competitive prices and sellers a comprehensive and flexible sales solution. Gmarket is especially popular with female shoppers in
their 20s, the largest segment in Korea.
(Sidebar 2)
About IAC
Founded in 1998 as an online auctioneer, Internet Auction Co. has become one of Koreas leading online marketplaces
with more than 21 million registered users. Acquired by eBay in 2001, IAC has played a key role in improving Koreas retail e-commerce market through greater selection for buyers and diverse sales solutions for sellers.
Exhibit I
Exhibit I
806 811 813 731 Intl
697
U.S
697 673 645 645 570
8.9 8.9 8.7 7.7 7.3 Intl
U S
7.3 7.2 7.0 6.6 6.4
357 366 386 410 458 Intl
U . S.
281 281 281 290 274
For more information, contact Usher Lieberman at ulieberman@ebay.com or call eBays media hotline at 408.376.7458. For the latest eBay Inc. news, go to ebayinkblog.com Updated: Q4 2008
Internet Auction
Co. Company Profile
www.auction.co.kr
IAC Snapshot
Gmarket Inc. Company Profile
www.gmarket.co.kr
Gmarket Snapshot
For more information, contact Usher Lieberman at ulieberman@ebay.com or call eBays
media hotline at 408.376.7458. For the latest eBay Inc. news, go to ebayinkblog.com Updated: Q4 2008
Additional
Information and Where to Find It
This fact sheet is for informational purposes only and is neither an offer to purchase nor
a solicitation of an offer to sell shares or American Depositary Shares of Gmarket. At the time the offer is commenced, eBay and its acquisition subsidiary will file tender offer materials with the U.S. Securities and Exchange Commission (the
SEC) and Gmarket will file a Solicitation/Recommendation Statement with respect to the offer. The tender offer materials (including an Offer to Purchase, a related Letter of Transmittal and certain other offer documents) and the
Solicitation/Recommendation Statement will contain important information, which should be read carefully before any decision is made with respect to the tender offer. The Offer to Purchase, the related Letter of Transmittal and certain other offer
documents, as well as the Solicitation/Recommendation Statement, will be made available to all holders of shares or American Depositary Shares of Gmarket at no expense to them at the SECs web site at www.sec.gov. Free copies of these
documents will be made available upon request by mail to eBay Inc., 2145 Hamilton Avenue, San Jose, CA 95125, Attention: Investor Relations or to Gmarket Inc., 9th Floor, LIG Tower, 649-11 Yeoksam-Dong, Gangnam-Gu, Seoul 135-912, Korea,
Attention: Investor Relations.
In addition to the Offer to Purchase, the related Letter of Transmittal and certain other
offer documents, as well as the Solicitation/Recommendation Statement, Gmarket and eBay file annual and special reports and other information with the SEC. You may read and copy any reports or other information filed by eBay or Gmarket at the SEC
public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the public reference room. eBays and Gmarkets filings with the SEC are also available to
the public from commercial document-retrieval services and at the website maintained by the SEC at http://wwvw.sec.gov.
For
more information, contact Usher Lieberman at ulieberman@ebay.com or call eBays media hotline at 408.376.7458. For the latest eBay Inc. news, go to ebayinkblog.com Updated: Q4 2008
Exhibit J
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Jay Lee
Corporate Senior Vice President, eBay Inc. & General Manager, eBay Asia Pacific
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Jay Lee is corporate senior vice president of eBay Inc., and general manager of eBay Asia-Pacific. In this role, he is responsible for managing this fast-growing region where the company has
presence in 11 markets including Korea, Australia, China, and India. Prior to taking responsibility for eBays Asia-Pacific business, he served as the CEO of Internet Auction Co., an eBay company in Korea, from May 2002 to December 2004.
Before joining Internet Auction Co., he was the CEO of Thrunet, a cable modem-based broadband access provider for two years. Thrunet was the first Korean company to list on NASDAQ. Before that, Lee worked as a Partner at the Boston Consulting Group
(BCG), focusing on High Tech and eBusiness companies. He was the first Korean Partner in the companys history. Lee holds a BS in international relations from Brown University and an MBA from Harvard Business School.
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Joo Man Park
Chief Executive Officer, Internet Auction Co.
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Joo Man Park has served as chief executive officer of Internet Auction Co., Koreas representative online marketplace since January 2005. He joined the company in 2002 as executive
director, and was promoted to chief operating officer overseeing strategy, sales and marketing in 2004. Previously, he served as planning director of Thrunet, a leading cable modem-based broadband access provider. Before that, he
was a consultant at Boston Consulting Group (BCG) and also worked for Hyundai International Bank. Park holds a BA in business administration from Korea University and an MBA from the University of Pennsylvanias Wharton
School.
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Young Bae Ku
Chief Executive Officer, Representative Director, Gmarket Inc.
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Young Bae Ku has served as chief executive officer and representative director of Gmarket Inc. since October 2001. Prior to assuming this position, Ku was Gmarkets director of business
operations from March to October of 2001. Before joining Gmarket in October 2000, Ku led the development of the Goodsdaq pilot service at Interpark Corporation, and was responsible for business development in the United States for Interparks
Goodsdaq Corporation. Before joining Interpark Corporation, Ku led field operations in oilfield services for Schlumberger in the Middle East and India. Ku received a bachelors degree in petroleum and mineral engineering from Seoul National
University.
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Additional Information and Where to Find It
This fact sheet is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell shares or American Depositary Shares of Gmarket. At the time the offer is commenced, eBay
and its acquisition subsidiary will file tender offer materials with the U.S. Securities and Exchange Commission (the SEC) and Gmarket will file a Solicitation/Recommendation Statement with respect to the offer. The tender offer
materials (including an Offer to Purchase, a related Letter of Transmittal and certain other offer documents) and the Solicitation/Recommendation Statement will contain important information, which should be read carefully before any decision is
made with respect to the tender offer. The Offer to Purchase, the related Letter of Transmittal and certain other offer documents, as well as the Solicitation/Recommendation Statement, will be made available to all holders of shares or American
Depositary Shares of Gmarket at no expense to them at the SECs web site at www.sec.gov. Free copies of these documents will be made available upon request by mail to eBay Inc., 2145 Hamilton Avenue, San Jose, CA 95125, Attention: Investor
Relations or to Gmarket Inc., 9th Floor, LIG Tower, 649-11 Yeoksam-Dong, Gangnam-Gu, Seoul 135-912, Korea, Attention: Investor Relations.
In addition to
the Offer to Purchase, the related Letter of Transmittal and certain other offer documents, as well as the Solicitation/Recommendation Statement, Gmarket and eBay file annual and special reports and other information with the SEC. You may read and
copy any reports or other information filed by eBay or Gmarket at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the public reference room.
eBays and Gmarkets filings with the SEC are also available to the public from commercial document-retrieval services and at the website maintained by the SEC at http://www.sec.gov.
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