Ebay has agreed to sell its online ticket marketplace StubHub to Geneva, Switzerland-based Viagogo Entertainment for $4.05 billion in cash. Shares rallied on the news.
Ebay purchased StubHub, which accounted for about 14 percent of its revenue, in 2007 for $310 million. Eric Baker, Viagogo's founder and CEO, co-founded StubHub, but left the company before it was sold to eBay, the press release announcing Monday's deal said.
"We believe this transaction is a great outcome and maximizes long-term value for eBay shareholders," said eBay interim CEO Scott Schenkel in a statement. "Over the past several months, eBay's leadership team and Board of Directors have been engaged in a thorough review of our current strategies and portfolio, and we concluded that this was the best path forward for both eBay and StubHub."
Baker said the deal "creates a win-win for fans - more choice and better pricing.”
Activist investor Elliott Management in January recommended eBay part with its StubHub and classified ads businesses, saying shares could double if the company were to focus on its online marketplace.
Elliott Management declined to comment on Monday's deal.
Ebay shares are up 25.1 percent year-to-date while the S&P 500 is higher by 24 percent.