Ebay on Monday said that it will be selling its ticket marketplace to Swiss ticket vendor Viagogo for $4.05 billion in an all-cash deal. The deal is likely to be closed by the end of first-quarter 2020.
This definitely is a great moment for Eric Baker, the chief executive officer of Viagogo given that he will be reunited with the brand which he had founded 19 years ago. At the same time SubHub and Viagogo will now together sell around millions of tickets across 70 countries.
Moreover, Ebay has also been under pressure from activist investors this year to sell off businesses that were not part of its core marketplace.
StubHub goes back to original owner
It must be great day for Eric Baker, chief executive, Viagogo. Baker had founded StubHub in 2000 when he was still a student. However, it was sold off to Ebay in 2007 for $310 million. Baker had left StubHub before that.
However, Baker continued to hold shares in StubHub but did not have control over the sale of the company at that time. That said, Baker, according CNBC, has lately been thinking of a possibility of bringing together the two companies.
Now that the two companies come together, it will now try to dominate the ticketing marketplace with a bigger presence. The companies are initially likely to operate independently before they they get integrated for smoother functioning.
Sigh of relief for Ebay
Ebay has been suffering for quite some time, owing to its changing focus. The company has also been under tremendous pressure from activist investors Elliott Management and Starboard Value, which earlier this year, asked Ebay to exit all businesses that were not part of its core marketplace.
This included StubHub and its online classified ads business. Eliot Management at that time had said that SubHub would fetch around $3.5 to $4.5 billion if a sale was made.
Ebay started struggling to keep momentum after launched its spinoff of PayPal in 2015. PayPal stole the game away from under the nose of Ebay.
Moreover, EBay also started losing out to its rivals like Amazon and Shopify, which are way ahead in the race. Selling off StubHub is Ebay's first step towards going back to its core business.