EBay rejects GameStop's $56bn bid as neither credible nor attractive'

"“We have concluded that your proposal is neither credible nor attractive,” eBay Chairman Paul Pressler said in a statement. eBay's Board is confident the company, under its current management team, is well-positioned to continue to drive sustainable growth. He also pointed to concerns with GameStop's bid, including its financing, its effect on eBay's long-term growth and the leadership structure of a potentially combined company."

"Cohen, who has built a 5 percent position in eBay, has signalled he may be ready to take the offer directly to eBay shareholders, possibly by calling a special meeting. That can be difficult as calling a meeting requires a bigger stake. The GameStop CEO said he has a debt financing commitment letter from TD, contingent on the combined company receiving an investment-grade rating."

"Last week, GameStop CEO Ryan Cohen surprised Wall Street with his bid, which included a $20bn debt financing commitment from TD Bank. Analysts and investors have doubted whether the half-cash, half-stock bid for eBay from the $12bn videogame retailer would close. EBay stock has been trading far below the offer price of $125 per share since the bid was made this month."

"EBay, which has roughly four times GameStop's market value, also underscored on Tuesday that its turnaround efforts under CEO Jamie Iannone have boosted growth, with its stock returning 201 percent since Iannone took the position six years ago. EBay stock has been trading far below the offer price of $125 per share since the bid was made this month."

GameStop CEO Ryan Cohen holds a 5% position in eBay and has hinted at taking a $56bn offer directly to eBay shareholders. eBay rejected the bid, stating it was neither credible nor attractive. eBay cited financing concerns, potential negative effects on long-term growth, and leadership structure issues for a combined company. eBay emphasized its turnaround progress under CEO Jamie Iannone, noting stock performance gains over six years. GameStop’s proposal included a $20bn debt financing commitment from TD Bank, but analysts questioned whether the half-cash, half-stock deal would close. eBay shares traded below the $125 offer price after the bid announcement.

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