GameStop's $55.5bn bid for eBay rejected as neither credible nor attractive'

"The board of eBay has rejected the US video games retailer GameStop's surprise $55.5bn bid (41bn) for the online marketplace, describing the proposal as neither credible nor attractive. Earlier this month, GameStop made an unsolicited bid for eBay, publishing a letter on its website outlining a half-cash, half-stock proposal. This was despite the US games company which became a global household name during the meme stock craze of 2021 being worth far less than its takeover target."

"In a letter to Cohen published on Tuesday, eBay's chair, Paul Pressler, said its board and advisers had reviewed GameStop's proposal and determined to reject it. Pressler said eBay had taken into account uncertainty around GameStop's financing proposal as well as its borrowing and the operational risks of a combined group. Cohen has previously said GameStop was prepared to launch a hostile bid and take the offer directly to eBay's shareholders if the board was not receptive to his proposal."

"GameStop has built up a stake of 5% in eBay and is offering to acquire the company at $125 a share, using about $9.4bn in cash on hand and $20bn in potential debt financing from TD Securities. Adding GameStop's market capitalisation of just over $10bn, the total remains about $16bn short of what it offered in its unsolicited bid. During the CNBC interview, Cohen dodged questions over how the company would make up the funds needed to close the deal, saying he did not understand the question."

GameStop made an unsolicited half-cash, half-stock bid to acquire eBay for $55.5bn, offering $125 per share. eBay’s board and advisers reviewed the proposal and rejected it, citing uncertainty around GameStop’s financing, borrowing considerations, and operational risks from combining the companies. GameStop’s market value was far below eBay’s, and GameStop’s shares fell after the offer, especially following CEO Ryan Cohen’s failure to explain how the deal would be funded during a CNBC interview. GameStop holds a 5% stake in eBay and proposed using $9.4bn in cash plus $20bn in potential debt financing from TD Securities, but the total remained short of the bid amount. Cohen previously indicated willingness to pursue a hostile approach if the board refused.

Read at www.theguardian.com