FAIM to distribute its cash:
EBay To Buy FairMarket's Tech, Business Assets For $4.5 Million
Friday June 20, 4:32 pm ET
biz.yahoo.com
WOBURN, Mass. -(Dow Jones)- FairMarket Inc. (NasdaqNM:FAIM - News) said eBay Inc. (NasdaqNM:EBAY - News) agreed to acquire its technology and business assets for $4.5 million cash.
The announcement follows a year-long commercial relationship between the parties to create and promote third-party promotions and loyalty programs.
In a press release Friday, FairMarket, an online auction software company, also said it plans a $38 million cash distribution to its shareholders soon after the closing of the eBay deal, anticipated in the third quarter and subject to FairMarket shareholder approval.
Shares of FairMarket traded recently at $2 after hours, according to the Island ECN (News - Websites) order book, after being halted on Nasdaq at $1.72, up 3 cents, or 1.8%.
The proposed transaction isn't expected to have a material impact on eBay's 2003 financial results.
In January, eBay raised revenue and earnings guidance for 2003 and said it expected pro forma earnings could be as high as $1.27 a share. GAAP earnings were forecasted at $1.12 a share and revenue was slated at about $1.9 billion.
A Thomson First Call survey of 15 analysts predicts eBay will earn $1.46 a share in fiscal 2003, excluding items, and post revenue of $2.07 billion. In fiscal 2002, eBay reported pro forma income of $254.9 million, or 87 cents a share, on revenue of $1 billion.
Officials at eBay weren't immediately available to comment whether this guidance has since changed.
Additionally, eBay plans to hire certain FairMarket employees but didn't disclose a number. FairMarket's current headcount wasn't immediately available.
FairMarket said it is rescheduling its 2003 annual shareholders meeting, previously scheduled for July 25 with a record date of June 23, in order to permit consideration of the eBay acquisition proposal.
FairMarket will announce the new meeting and record dates when set by its board.
Company Web site: ebay.com; fairmarket.com
-Karen M. Lee; Dow Jones Newswires; 201-938-5400 |
