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EBay offers $530 m for S Korean arm

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CIOL Bureau
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SEOUL: EBay Inc. offered about $530 million to buy the remainder of South Korean affiliate Internet Auction Co. Ltd. as it pushes deeper into Asia, saying key shareholders had accepted a 79 percent increase to an earlier offer.



The world's biggest online auctioneer said it had agreed to pay key institutional shareholders $325 million to raise its stake in South Korea's industry leader to 86 percent from 62 percent.



San Jose, California based eBay said it intended to start a tender offer in coming weeks for the remaining shares of Internet Auction.



Internet Auction has 9.9 million subscribers, more than a fifth of the country's population, and had 2.5 million items up for auction at the end of June. South Korea has the world's highest broadband penetration rate.



EBay agreed to buy shares from the institutional shareholders at 125,000 won each, compared with Tuesday's closing price of 102,800 won and an offer of 70,000 won that the shareholders rejected in December.



The shareholders include U.S. hedge funds Tiger Technology, Lone Pine Capital LLC and Viking Global Investors.



The offer price values the company at about 60 times forecast earnings per share, almost three times the average for Korean Internet stocks.



The stock jumped 12 percent to its daily permissible high of 115,100 won. The broader KOSDAQ market on which it is listed was 2.7 percent higher.



Internet Auction is expected to report 25.2 billion won in net profits this year against 18.6 billion last year.



South Korea has 11 million broadband Internet users out of a population of 48 million.



(Additional reporting by Kim Miyoung)

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