eBay To Buy GSI Commerce (EBAY)

In a bid to draw more buyers and sellers, eBay (NASDAQ: EBAY) plans to buy GSI Commerce (NASDAQ: GSIC), an e-commerce company, for $1.96 billion in cash, according to an article in Reuters.

eBay said on Monday that it offered $29.25 per share to GSI shareholders. Shares rose by a 50.9 percent premium over its closing price on Friday. Shares rose by the same amount in NASDAQ trading on Monday, March 28, 2011.

GSI is a provider of technology, payment processing and customer care services for e-commerce websites and owns Web businesses such as Rue La La and ShopRunner.

eBay will sell off GSI's licensed sports merchandise business and 70 percent of Shop Runner and Rue La La, which GSI's founder and Chief Executive Michael Rubin will run as part of a new holding company. eBay will lend $467 million and the loan to Rubin's new company. eBay said the deal was worth $2.4 billion

According to Reuters, eBay said the acquisition would have little effect on its 2011 adjusted earnings forecast and would add to 2012 earnings and that 2011 net income would be hurt by 30 to 34 cents per share.

ENTITIES: eBay, GSI Commerce, Michael Rubin