Cobone.com, the daily deals website based in the UAE, is in talks with an Egyptian venture capital firm over a sale for up to US$40 million in cash.
Cobone.com in $40 million sale talks
Cobone.com, the daily deals website based in the UAE, is in talks with an Egyptian venture capital firm over a sale for up to US$40 million (Dh146.9m) in cash.
The talks emerged yesterday, just weeks after Cobone's rival LivingSocial pulled out of the Middle East market.
OTVentures, an affiliate of Orascom Telecom, Media & Technology based in Cairo, has made an offer to buy Cobone, according to sources close to the situation.
Jabbar Internet Group, which owns the majority of Cobone, has been searching for a buyer for more than two months and is looking for between $20m and $40m for the website, sources say.
"A deal would be 100 per cent acquisition, cash, no liabilities," said one source.
Cobone.com and OTVentures both declined to comment on the deal.
Samih Toukan, the chairman and chief executive of Jabbar Internet, said the group had received an offer for one of its companies but would not disclose its name.
"We did receive an offer from an interested investor and we appointed an adviser. We are evaluating the offer. We have more than one offer," he said.
Mr Toukan claimed, however, that Jabbar Internet had not been canvassing investors in the market to buy Cobone.
"Why would we seek people to sell if we have an offer on the table? We have not decided to sell Cobone," he said. "We do not have any funding problems and continue to support Cobone."
In addition to Cobone, Jabbar Internet has majority stakes in other internet companies, including Souq.com, the online shopping mall, Cashu.com, a payment service provider, Sukar.com, the online shopping club, Ikoo.com, an advertising network, Nibras, a learning portal for further education, and Tahadi.com, a gaming website.
Group buying or daily deals sites typically sell discount vouchers for goods and local services and email offers daily to subscribers.
Founded in 2010, Cobone quickly expanded to become the biggest group buying website in the Middle East with more than 1.5 million subscribers receiving its emails on a daily basis. It is unclear whether Cobone is a profitable company.
In the UAE, Cobone is matched in size only by Groupon, the global market leader now embarking on its own expansion throughout the region, starting in the rest of the Arabian Gulf.
Competition has hotted up in the sector in the past 12 months, with more than 20 websites now plying their trade in the UAE.
LivingSocial, generally deemed the second-biggest player in the world, entered the Middle East last year when it bought the local start-up GoNabit for an undisclosed sum, but quit the market at the end of August after sustaining heavy losses.
Cobone has also not been without turmoil - two of the founding employees resigned for undisclosed reasons this week.
The head of sales Henri Hazoughi stepped down, alongside Greg Hucker, the chief technology and operations officer. Paul Kenny, the chief executive, remains at the company.
Hermann Behrens, the chief executive of The Brand Union Middle East, a brand and creative design consultancy agency, said Cobone's name was well known throughout the UAE.
"There's definitely brand equity but I think the business model is not proven as sustainable," he said.
"There's a lot competition and there's going to have to be a clean-up of the space with mergers and acquisitions. But I think someone has realised there is enough in Cobone to make it a success."
Before setting up Jabbar Internet, Mr Toukan founded Maktoob.com, the online portal, in 2000 and sold the business to Yahoo in 2009 for $164m.
In February, OTVentures acquired 51 per cent of Dare'n'Deal, one of the largest group-buying websites in Egypt, valued at 20 million Egyptian pounds (Dh12m).