Eckhard Pfeiffer goes under QXL hammer

Auction sites link up for European domination

UK online auctioneer QXL has agreed to buy Eckhard Pfeiffer's latest venture, Ricardo.de, for 668 million in stock.

Shareholders in the German company will get 42.6 QXL shares for every Ricardo share. Based on QXL's closing share price yesterday of 180 pence, the offer values each Ricardo share at around 27 per cent over its own closing market price.

The combined London-based company, to be called QXL Ricardo Plc, will have 1.3 million members. The deal is expected to be completed by August.

Online auction site Ricardo was launched in the UK in January, with ex-Compaq CEO Pfeiffer installed as leader. It also operates in Germany, the Netherlands and Switzerland, and brings 670,000 registered users to the deal.

QXL's market value is over 640 million, and Ricardo's is around 780 million, giving the new company a market value of $1.7 billion, and US giant eBay a run for its money.

This is "another aggressive acquisition to make eBay twitch", said analyst Richard Holway, who viewed the move as beneficial for investors in both QXL and Ricardo.

"QXL shareholders have acquired a substantial German presence and Ricardo shareholders have swapped their overpriced equity for another chunk of overpriced equity (and they have got a 27 per cent premium into the bargain), both parties have a stronger offering and expanded geographical range."

"QXL was always tipped to be scooped up by a European player or eBay. It looks as if QXL has done the scooping in Europe and eBay would struggle to buy it now," he added. ®

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