eBay rejected GameStop’s $55.5bn unsolicited takeover approach. The eBay board sent a sharply worded letter to GameStop’s CEO, stating the proposal was neither credible nor attractive. Directors cited uncertainty about how the deal would be financed and concerns about how the proposal would affect eBay’s long-term growth and profitability. The board also raised operational risks and issues related to the leadership structure of a combined company. Additional concerns were raised about GameStop’s governance. GameStop attempted to strengthen its bid with a commitment letter from TD Securities for about $20bn of debt financing, but analysts warned the financing would burden eBay with GameStop’s borrowings at a time when eBay is improving its performance.
"eBay has firmly slammed the door on a $55.5bn (£40.9bn) unsolicited takeover approach from American video games retailer GameStop, branding the bid "neither credible nor attractive". The rejection, communicated in a sharply worded letter from eBay's board to GameStop chief executive Ryan Cohen, will come as little surprise to anyone with a passing acquaintance of the relative scale of the two businesses."
"In its rebuff, the eBay board cited "uncertainty" over how the deal would be financed, alongside concerns about "the impact of your proposal on eBay's long-term growth and profitability". Directors also pointed to "operational risks, and leadership structure of a combined entity", as well as questions over "GameStop's governance"."
"GameStop had attempted to bolster the credibility of its overture with a commitment letter from TD Securities for roughly $20bn of debt financing. Yet that prospective debt pile is precisely what gave eBay's board, and a chorus of independent analysts, pause for thought. Sucharita Kodali, retail analyst at Forrester, told Business Matters the proposition was hardly "a terribly good offer"."
"That recovery is no idle boast. Despite the well-documented competitive squeeze from Amazon, Etsy and, more recently, t"
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