Just out on WSJ online:
\"EBay to Acquire PayPal For $1.5 Billion in Stock
A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
EBay Inc. agreed to acquire PayPal Inc., an online payment service, in a stock-swap transaction that the companies valued at $1.5 billion.
The deal will pay PayPal holders $23.61 in eBay stock for each of their PayPal shares, an 18% premium over PayPal\'s closing stock price on the Nasdaq Stock Market on Friday. A deal between the companies, whose share prices showed resilience as much of the Internet-stock universe imploded, had long been a subject of speculation.
\"eBay and PayPal have complementary missions. We both empower people to buy and sell online,\" said Meg Whitman, president and chief executive of eBay, the Internet auction service. \"Together we can improve the user experience and make online trading more compelling. We can also capture greater value from the e-commerce opportunities occurring both on and off our site,\" she said, in a statement.
EBay will acquire each PayPal share in exchange for 0.39 eBay share. Based on eBay\'s closing stock price of $60.55 on Nasdaq Friday, the transaction values PayPal at $1.5 billion. PayPal closed Friday at $20, up 92 cents, for the day.
PayPal, which will continue to operate as an independent brand, is a leading online payments solution.
About 60% of PayPal\'s business takes place on eBay. The auction service said it will phase out its electronic payment service, Billpoint, after the transaction with PayPal closes, expected around year\'s end. The remaining 40% of PayPal\'s business takes place among small merchants.
Earlier this year, PayPal had been working to bolster Billpoint. Seeking to compete with PayPal, eBay in February paid about $43.5 million to acquire the roughly one-third stake in Billpoint it didn\'t already own. EBay bought the remaining shares in the PayPal rival from Wells Fargo & Co.
EBay said the Paypal acquisition will reduce its earnings as the result in $11 million per quarter in expenses associated with stock-based compensation and amortization of intangible assets. The company said its pro-forma earnings per share would be increased by the deal.
The company also said the deal will include $18 million in acquisition-related costs. It didn\'t elaborate.
Also on Monday, eBay posted second-quarter earnings of $54.3 million, or 19 cents a share, on revenue of $266 million. The earnings, which are more than double the level it reported in the same period last year, edged the expectations of Wall Street analysts, whose mean estimate was 17 cents a share. EBay previously had estimated its revenue at $260 to $265 million.
The company, which released only a partial earnings report, said its full report for the quarter would be posted on July 18.\"
| || || |