QXL.com to challenge dominance of eBay

UK online auctioneer QXL.com has acquired German rival ricardo.de in a bid to become Europe's premier auction site in the face of US giant, eBay.

The enlarged group is expected to be called QXLricardo plc once the £668m deal is completed this August, and will be valued at £1.4bn. It will have 1.3 million registered users and a multilingual range of websites across Europe.

Shareholders of ricardo.de will receive 42.6 QXL.com shares for every share, valuing the company at £668m - a 27 per cent premium over its last closing price and one which gives shareholders up to a 43.8 per cent share of the newly merged group.

Eckhard Pfeiffer, former Compaq chief, and Christoph Linkwitz, chief executive at ricardo.de, are expected to join the board of the new company, which will remain under QXL.com's leadership team of chief executive Jim Rose and chairman Jonathan Bulkeley.

QXL.com's attempt to establish itself as the "European eBay" has come under threat from eBay itself, which has launched a series of localised European sites this year reaping first quarter sales of $86.92m in the process. This far outweighs QXL.com's last reported fourth quarter sales of £5.2m and Ricardo.de's first quarter total of £15m.

QXL.com has become increasingly aggressive in the last six months, acquiring Swedish competitor Bidlet for £347m in a deal expected to be completed this July, and Norwegian online auction site DinSide Auksjon for £13.2 million last December.

The company is now of a size which analysts believe would make any takeover bid from eBay unlikely, and QXL.com's management is looking to take up the challenge posed by eBay's European expansion.

"This is an historical moment for ecommerce in Europe," said Linkwitz. "The merger of two public European ecommerce companies of this size creates a very powerful player in Europe. The fit between the management teams and the complementary QXL.com and ricardo.de cultures provides a solid base to build a true pan-European company."