A German daily deals company is bidding for LivingSocial's Middle East assets in what it described as a "fire sale" by the loss-making business.
The Düsseldorf-based Mox Deals is one of three players in the running to buy LivingSocial's regional assets.
The company's bid is "much less" than LivingSocial's US$3 million (Dh11m) asking price, said Frank Scheunert, the chief executive. "We're bidding very low. Nobody would give them $3 million."
It emerged last week that LivingSocial had been in discussions with a number of potential buyers to sell its subscriber bases in the UAE, Egypt and Lebanon, amid heavy losses in the region.
"There were about 10 parties interested, and … they only have three concrete bidders left," said Mr Scheunert.
LivingSocial, headquartered in Washington, is looking to exit the Middle East by the end of the month as it looks to cut its losses in the region's highly competitive daily deals sector.
"It's a fire sale," said Mr Scheunert. "They spent all the money the mother company allocated to them. They have so much pressure from [the United States] that they just have to get out. It's within 10 days I would say."
Mox Deals already offers daily deals in the UAE, as well as in Germany, the US and Singapore. Mr Scheunert said it was also considering launching in Saudi Arabia, Vietnam and Malaysia.
The company is listed on the Frankfurt Stock Exchange after a small initial public offering.
Mr Scheunert declined to say exactly how much the bid for LivingSocial's Middle East operations was worth.
But the executive said he was interested in assets such as LivingSocial's database of email addresses, thought to number about 750,000, as well as part of its infrastructure and in taking on three or four of its sales staff.
Were a bid by Mox Deals to be successful, the business would be run on an "extreme cost-saving" basis, Mr Scheunert said.
The executive said Mox Deals was looking to target Asian expatriates in the UAE and hoped to make a profit by 2014.
"Mox Deals will not make money within the first year, but maybe the second. Because we are extremely cost-saving," he said.
More than 20 daily-deals sites serve the UAE, and Mr Scheunert said he foresaw many of those failing.
"Out of the 20 websites, there will be 10 to 15 insolvencies. And the last five will merge to one," he said.
Groupon yesterday ruled out bidding for the LivingSocial subscriber database.
Alexander Kappes, the chief executive for Groupon Middle East, said the email list offered little value to his operations.
"Groupon has twice the LivingSocial subscribers," he said. "There will be a high percentage of doubled-up subscribers if we were to buy the database, so for us, the added value is almost nil."
"We are not interested."
LivingSocial executives did not respond to a request for comment about a possible sale of its Middle East assets.
But Eric Eichmann, the president of LivingSocial's international operations, confirmed to staff it was looking to leave the Middle East as it had failed to make a profit in the regional markets in which it operates.
"We are likely to be exiting those markets either through a sale or suspension of those operations in the near future," Mr Eichmann told employees in an internal email.
Documents seen by The National show LivingSocial has incurred significant losses in the Middle East, and in one month this year it lost more than $500,000.
The company entered the region last year through the acquisition of the local deals site GoNabit for an undisclosed sum.
It has battled with intense competition in the cutthroat daily deals market, which is led by the homegrown player Cobone.
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