eBay settles disputes with Skype founders
eBay has settled its disputes with Skype's founders, clearing the way to sell a majority stake in the VoIP provider to an investor group for €1.35 billion.
The parties said they had reached an agreement whereby Skype founders Niklas Zennstrom and Janus Friis will trade the Skype technology that eBay did not own, as well as a “significant capital investment,” for a 14% stake in Skype.
Under the deal, which values Skype at €1.84 billion, the investor group will purchase 56% of Skype - compared to the 65% originally planned - and eBay will retain the remaining 30%.
The litigation had been preventing eBay from selling the 65% stake to an investor group led by Silver Lake for €1.27 billion in cash, and an extra €83 million via a convertible note. The transaction will now proceed.
“We are very pleased to have the litigation resolved, and we look forward to working with Niklas, Janus and the other investors to help the company achieve its full potential,” Silver Lake managing director Egon Durban said.
But Silver Lake co-investor Index Ventures, which had been embroiled in a separate legal battle with Zennstrom and Friis, has pulled out of the group.
Index partner Michelangelo Volpi had been accused of using confidential information he had acquired during his tenure as CEO of Joost – the internet TV service founded by Zennstrom and Friis – while preparing the Skype bid.
The dispute between the original owners and eBay revolved around a key piece of core Skype’s P2P technology. Zennstrom and Friis had held on to the patent when they sold the company to eBay for €1.7 billion in 2005, instead licensing its use.
But after a dispute over terms, they pulled the license earlier this year. After eBay announced its intention to sell a majority stake in Skype in September, Zennstrom and Friis - through their P2P company Joltid - sued eBay for copyright infringement in a US court.