EBay Inc., based in San Jose, California, owns and operates a worldwide marketplace on the Internet. There, buyers and sellers can exchange their goods locally, nationally and internationally.

In March, eBay offered to purchase GSI Commerce Inc. in a $2.4 billion acquisition. GSI is a provider of interactive marketing services to businesses. As a result of the acquisition, eBay is hoping to better connect with buyers and sellers.

GSI is based in Pennsylvania. The marketing company provides services to more than 2,000 sports leagues, teams and branded retailers, such as Toys "R" Us, the NFL and Polo Ralph Lauren.

As part of the transaction, eBay is planning on selling off GSI's licensed sports-merchandise business to another company. EBay is also planning on selling off 70 percent of ShopRunner and Rue La La, both of which are online shopping website businesses owned by GSI.

This divestiture was at the heart of the lawsuit filed by several of GSI's major shareholders. The shareholders filed a lawsuit challenging the buyout of GSI and intended to block eBay's acquisition of GSI. They felt that their shareholders' rights were being violated because they felt that the marketing firm was sold for less money than its value and with terms that overly favored eBay. Specifically, they claim that they were not being paid adequately for the businesses that eBay was planning to unload as the transaction was originally structured.

As a result of the lawsuit, eBay has agreed to pay about $24 million to resolve the investor lawsuits, in addition to the acquisition price. This means that GSI shareholders will receive 33 cents a share in addition to eBay's $29.25 per share offer under the original terms of the acquisition.

Source: Philadelphia Business Journal, "EBay to pay more for some GSI stock to settle shareholders suit", 13 June 2011