QXL, ricardo Merger Creates Pan-European Auction Leader
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The deal values the German-based ricardo at £668 million (just over $1 billion), 27 per cent above its closing price on May 15. QXL has agreed to exchange 42.6 of its own shares for each ricardo share, giving ricardo's shareholders 43.8 per cent of the new company's share capital.
Ricardo's Chief Executive Officer Christoph Linkwitz hailed the merger as "a historical moment for e-commerce in Europe".
"The merger of two public European e-commerce companies of this size creates a very powerful player in Europe. The fit between the management teams and the complementary QXL and ricardo cultures provides a solid base to build a true pan-European company," said Linkwitz.
From QXL, Jonathan Bulkeley will continue as chairman while Chief Financial Officer Jim Rose will lead the management team. Ricardo Chairman Eckhard Pfeiffer and CEO Christoph Linkwitz will be directors of QXLricardo.
Launched in July 1998, ricardo has expanded from its German roots to operate online auction services in the Netherlands, Switzerland and the United Kingdom. At the end of March 2000 it had over 0.67 million registered users and generated £15 million ($22.8 million) of gross auction value in Germany for the quarter.
QXL, with half a million registered users at the end of January 2000, operates in nine languages and currencies across Europe. For the quarter to the end of December 1999 it generated £5.2 million ($7.9 million) in gross auction value.
Jim Rose said the merger of QXL and ricardo would help the combined businesses to expand and strengthen their brand presence. It would also add value for QXL shareholders, he said.
QXL will release its results for the quarter to the end March 2000 at the end of May.