EBay, GSI settle deal claims for 33 cents a share

By Tom Hals

WILMINGTON, Del. (Reuters) – Stockholders of GSI Commerce Inc, which EBay Inc is acquiring, will get a payment of 33 cents a share in a settlement of a merger-related lawsuit, the companies said on Monday.

The agreement clears the way for the merger, which was announced in late March, to close on Friday.

The deal settles the claims of GSI shareholders who accused the company’s chief executive officer, Michael Rubin, of using the merger to line his own pocket.

The payment to shareholders is separate from the $29.25 per share, or nearly $2 billion, that eBay offered to buy GSI, which provides e-commerce services.

As part of the merger deal, EBay will sell GSI’s licensed sports merchandise business and 70 percent of its ShopRunner and Rue La La businesses to a holding company led by Rubin.

While eBay has said it does not consider the business it is selling to be central to its plans to expand, the divestment plans riled GSI shareholders, who said Rubin had touted some of those operations for their potential growth.

Fanatics Inc was cited as an example in court documents. EBay planned to sell the business to Rubin for less than GSI agreed to pay for it in March.

In court documents, shareholders had called the planned sale to Rubin’s holding company “nothing less than a divergence of money from eBay to Rubin, money that could have been used to pay increased merger consideration to GSI’s public stockholders.”

Shares of GSI rose 0.9 percent in early Nasdaq trading to $29.53, while eBay gained 0.1 percent to $29.99.

EBay, GSI and a lawyer for the shareholders did not immediately return calls for comment. (Additional reporting by Phil Wahba in New York; Editing by Lisa Von Ahn)