eBay would consider Skype bids; Validus plays odds on IPC buy; Charlotte Russe piques interest

By Cristal Cody

Tupelo, Miss., April 16 - eBay Inc. stressed on Thursday it plans to launch an initial public offering of Skype Technologies SA in 2010 - unless a bidder emerges with an offer that could rival an IPO's potential.

Meanwhile, eBay sent shares of Korean online marketplace Gmarket Inc. up $3.83, or 19.19%, to close at $23.79 on Thursday after the company offered $1.2 billion for Gmarket's outstanding shares.

In other deals, Hamilton, Bermuda-based Validus Holdings, Ltd. played the odds on Thursday and filed preliminary proxy materials with the U.S. Securities and Exchange Commission for its proposed $1.68 billion stock acquisition of IPC Holdings, Ltd.

Analysts say the company's hostile takeover attempt only has a small chance of success.

Also on Thursday, Charlotte Russe Holding, Inc. said it can focus on its sale process now that private investment firm and shareholder KarpReilly LLC has backed off efforts to replace three board members.

Moving to Wall Street, stocks staged a rally on Thursday.

The Dow Jones Industrial Average added 95.81 points, or 1.19%, to close at 8,125.43.

The Standard & Poor's 500 index rose 13.24 points, or 1.55%, to 865.30, while the Nasdaq Composite index gained 43.64 points, or 2.68%, to close at 1,670.44.

eBay eyes growth

San Jose, Calif.-based eBay bought Skype for $2.6 billion in 2005 but took a $900 million writedown on the business in 2007.

"Let me be clear, we will maximize the value of Skype. We believe an IPO will achieve this," eBay chief executive officer John Donahoe said on the conference call to announce the company's acquisition of Gmarket.

"If we receive an unsolicited offer, naturally we will evaluate it against what we believe can be achieved during a public offering, and we believe an IPO during the first half of 2010 is very feasible," he said.

Bob Swan, eBay's chief financial officer, said on the call that the company will remain a significant shareholder in the internet communications company following the IPO.

"Skype has run almost as a separate standalone business," he said.

eBay on Thursday offered $24.00 cash a share for Gmarket's outstanding stock and American Depositary Shares, which represents a 20.2% premium to the stock's closing price of $19.96 on Wednesday.

eBay plans to use the acquisition to move into other parts of Asia, Donahoe said.

"The market platform offers nice potential to expand into other countries," Donahoe said. "Our focus is on achieving value in Korea over the next six to 12 months and then we'll be looking at ways to expand into other parts of Asia, probably starting with Japan."

eBay expects a short wait for final Korean regulatory approval of the acquisition.

The deal is expected to close in the second quarter of 2009.

Shares of eBay rose 9 cents, or 0.63%, to close at $14.41 on Thursday.

Validus's IPC offer

Validus has offered an exchange of one IPC share for 1.2037 Validus shares. The offer values IPC shares at $29.98 each and represents an 18% premium based on the closing stock price on March 30, the day prior to Validus' offer.

"Despite being prevented from talking to IPC under the highly restrictive terms of its agreement to be taken over by Max Capital, we are committed to taking the necessary steps to complete our transaction with IPC, including securing approval from our shareholders for the issuance of shares to complete the combination," Ed Noonan, Validus' chairman and CEO, said in a statement Thursday.

On Wednesday, the U.S. Federal Trade Commission cleared IPC Holdings' $912 million stock acquisition of specialty insurer Max Capital Group Ltd.

The Bermuda-based insurers' products and services are more complementary than what a combined IPC/Validus could offer, an analyst told Prospect News.

"The IPC/Max deal has a better chance of going through," the analyst said. "IPC and Max want to be together much more than IPC wants to be with Validus."

Validus' stock rose 58 cents, or 2.52%, to close at $23.63 on Thursday.

IPC's stock added 17 cents, or 0.64%, to close at $26.75, and Max Capital shares closed up 6 cents, or 0.35%, at $17.14.

Charlotte Russe sale

Charlotte Russe' executives are pursing a sale process while trying to re-elect directors at the upcoming annual shareholders meeting on April 28.

John Goodman, Charlotte Russe' CEO, said on the second-quarter earnings conference call after the market closed on Thursday that the "sale process is progressing well and we're encouraged by the level of interest by participating buyers."

The San Diego-based women's retailer has said that preliminary bids are due this month.

Adrienne Tennant of Friedman, Billings, Ramsey & Co. said in a research note released Thursday to Prospect News that the company's "guidance suggests cost control, lower inventory, and new merchandising strategies are working."

On Thursday, KarpReilly LLC withdrew its board fight after proxy advisory firms RiskMetrics Group, Inc. and Glass, Lewis & Co. recommended investors support all of Charlotte Russe's director nominees.

KarpReilly founder Allan Karp offered about $200 million to buy Charlotte Russe last year but was rejected.

RiskMetrics said in the report released to Prospect News that the "board has taken appropriate action in light of deteriorating performance to review strategic alternatives and install a new management team with relevant industry experience."

Shares of Charlotte Russe closed down 23 cents, or 1.89%, at $11.93 on Thursday.

Mentioned in this article:

Charlotte Russe Holding, Inc. Nasdaq: CHIC

eBay Inc. Nasdaq: EBAY

Gmarket Inc. Nasdaq: GMKT

IPC Holdings, Ltd. Nasdaq: IPCR

Max Capital Group Ltd. Nasdaq: MXGL

Validus Holdings, Ltd. NYSE: VR

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