RealTime IT News

QXL, ricardo Merger Could Be Off

[London, ENGLAND] In a terse statement Thursday, European online auctioneer QXL.com plc indicated it was reconsidering its proposed merger with ricardo.de AG in light of "certain information."

Following the announcement, shares in ricardo.de slumped 20 percent while those in QXL.com rose by 15 percent.

The full text of the QXL.com statement reads: "QXL.com plc has received certain information from ricardo.de AG in the period following the announcement of the proposed transaction on May 16, 2000. The Board of Directors of QXL.com is evaluating the implications of this information on the proposed transaction. A further announcement will be made in due course."

The proposed merger between the two companies would have created a pan-European auction leader with strengths in both consumer-to-consumer and business-to-consumer auctions. Back in May, Ricardo's Chief Executive Officer Christoph Linkwitz hailed the merger as "a historical moment for e-commerce in Europe."

Whatever happens after QXL.com's re-evaluation of the deal, the sharp corrections in the share prices of the two companies will mean that the deal can scarcely go ahead as planned. Originally, the offer valued ricardo at £668 million (just over $1 billion), a full 27 percent above its market price mid-May.

Since May, shares in both companies have lost two-thirds of their value. Now, after the latest slump in its share price, ricardo is worth just $219 million.

No further information about the status of the merger was available from either company on Thursday morning.

QXL recently completed its purchase of a majority interest in Scandinavian online auction service Bidlet AB, and has extended its services into Belgium with a new site, www.qxl.be, available in both French and Dutch languages.

However, despite all the activity, QXL announced poor results for the three months ended June 30, showing a loss of $23.3 million. Its sales and marketing expenses were up by a factor of ten over the same period last year.

QXL operates in the U.K., Germany, France, Italy, Belgium, the Netherlands and Spain, and has made acquisitions in Sweden, Finland, Norway, Denmark and Poland.

Launched in Germany in July 1998, ricardo also operates online auction services in the Netherlands, Switzerland and the United Kingdom.