[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.
