SAN FRANCISCO -- EBay Inc., which has been aggressively expanding in Asia, plans to increase its stake in South Korea's largest online auction company.
The Internet auction giant said Tuesday night that it would purchase nearly 3 million publicly held shares of Internet Auction Co. from institutional investors, mainly venture capitalists, to boost its ownership stake to 86 percent from 62 percent.
The $325.6 million cash purchase is expected to be completed as soon as the Seoul-based company's stock hits a target price of $108.85 and clears local securities regulations.
Internet Auction Co. traded yesterday at $100.23, up 12 percent from Tuesday. Shares in eBay climbed $1.09 to close at $87.63 on the Nasdaq Stock Market.
San Jose, Calif.-based eBay said it hopes to increase its stake further in the coming weeks. Spokesman Chris Donlay said yesterday the company is "willing to buy any and all shares from anyone who wants to sell them."
EBay said the purchase would not affect its financial results. Executives said in July they expected 2004 sales as high as $3.185 billion, $35 million higher than they previously predicted.
Although South Korea slipped into a recession in 2003, its 48 million residents present a lucrative e-commerce market. South Korea has the world's highest percentage of households using broadband Internet connections.
Internet Auction is the most recent target of eBay's Asian expansion. Although eBay pulled out of Japan in 2002 because it couldn't compete against homegrown sites, the company has expanded elsewhere in Asia, opening offices and advertising in Hong Kong, Singapore, Taiwan, Korea, and India.