Merger Plan Likely to Delay EToys Stock Sale

A highly anticipated first-time stock offering from EToys Inc., the Santa Monica-based online toy seller, is expected to be delayed after the company announced Monday it has agreed to merge with BabyCenter Inc., a San Francisco online firm. Terms of the stock-swap deal were not disclosed. The deal is expected to be completed by July, EToys said. Afterward, BabyCenter shareholders would own about 15% of the combined company.

EToys was expected to raise as much as $115 million next Monday in an IPO that would have been one of the largest by a Southern California tech firm this year. Because the merger with BabyCenter represents a major change in the firm’s financial status, it is expected to file additional documents with the Securities and Exchange Commission for its IPO, which may delay the deal for an indefinite period, analysts said.