A new report from Citi Research says eBay could be an attractive acquisition, inspired perhaps by today's news that Verizon will acquire Yahoo. The Wall Street firm cites eBay's strong brand, its 164 million active online shoppers, attractive margins, and some investment numbers (ROIC and free cash flow).
eBay also has a global presence (it points to the fact that a significant amount of eBay's top sellers reside in China).
"We believe a wide range of companies could potential have an interest in acquiring eBay, including foreign eCommerce companies with an interest in expanding their global footprint (e.g., Alibaba), digital media companies interested in adding transactional capabilities to their media properties (e.g., Alphabet), incumbents in both media and retail looking to strengthen their digital footprint (e.g., Wal-Mart), and private equity companies, among others." (Note that Alphabet is the new name of Google's parent company.)
Interestingly, Citi's Mark May doesn't mention any payments companies, but given eBay has split with PayPal, with whom it had synergies, mightn't that be more likely than an existing retailer like Walmart?
While it's always fun to play the M&A game - who might buy whom? - it could have serious repercussions for eBay sellers. We blogged about this possibility earlier this year, when sellers had some interesting thoughts. Alibaba was seen as a likely acquirer by some, one even suggested Amazon could eliminate one of its largest competitors through an eBay acquisition.
For companies who might be considering an acquisition of eBay, what would you tell them?
And is there any particular company you'd like to see acquire eBay?