Ebay bids for and wins GSI Commerce

Ebay has been doing some bidding and buying of its own.

The auction site announced that it will buy GSI Commerce, a company which specialises in ecommerce and interactive marketing services and it’s not being stingy about the price either. According to the announcement, Ebay will shell out  $29.25 a share, which totals to a not insignificant $2.4 billion.

The company will use both cash and debt to make the purchase, which is expected to close in the third quarter of 2011.

However, Ebay doesn’t look like it’s practising what it tells its customers to do, and that’s bargain for the best price. The merger consideration represents a 51 percent premium over GSI’s closing price on March 25 and a 47 percent premium over the average closing price of GSI Commerce common stock over the 30 trading days.

It doesn’t seem fussed about the price hike however, with head honchos at the company claiming that the acquisition will “significantly strengthen [the] ability to connect buyers and sellers worldwide,”

The company plans to combine GSI with Ebay Marketplaces and PayPal, to help it benefit
with long-term commerce services relationships with retailers and brands as well as “to drive innovation, engage customers and help people shop anytime, anywhere and on any device.”

However, there are some losers. As part of the transaction, eBay will dump GSI’s licensed sports merchandise business and 70 percent of ShopRunner and Rue La La. They have been given the boot as eBay believes these businesses are not core to its long-term growth strategy.