Rakuten confirms attempt to buy US coupon firm Ebates; stock falls 4% over rumored $1B price

Leading Japanese ecommerce firm Rakuten (TYO:4755) released a statement today admitting the company’s involvement in an acquisition bid for American online coupon firm Ebates. This comes after Nikkei reported on Saturday morning that Rakuten had nearly finalized a deal worth over JPY 100 billion (US$951 million).

Ebates offers coupons or cash-back incentives to drive online shopping. Stores register on Ebates and post coupon codes or cash-back terms. Ebates users can then copy the coupon link, click on the product they want to buy, and make the purchase. For cash-back offers, Ebates will send the user a check four times a year or more.

The company was founded in 1998. According to its most recently released data, as of 2012, the company had partnered with 2,600 stores, including Amazon, and seen US$1.6 billion in purchases during that year.

News of the possible acquisition come as a slight surprise. Media outlets such as Forbes and Bloomberg had predicted Ebates would IPO in 2014.

For Rakuten, this acquisition provides a new revenue stream in the United States, but not necessarily a new way to acquire more merchants in its ongoing war with Amazon. Stockholders seem unimpressed. The stock dipped 4.15 percent to JPY 1,270 as of 1.30PM local time, under heavy trading.

For Ebates, the exit would be in line with the IPO of rival RetailMeNot. After going public, that firm saw its valuation rise to US$1.5 billion. It’s market cap currently stands at approximately US$950 million.

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Disclosure: The author is a former employee of Rakuten. Please see our Statement of Ethics.