eBay Rejects GameStop’s $56 Billion Takeover Bid
eBay on Tuesday rejected GameStop’s $56 billion takeover proposal, calling the unsolicited bid “neither credible nor attractive,” reports CNBC. GameStop CEO Ryan Cohen last week unveiled an audacious bid for eBay, offering to acquire the online marketplace for $125 per share in a cash-and-stock deal. eBay is much larger than the video game retailer, with a market cap of just over $48 billion, while GameStop’s is roughly $10.3 billion.
eBay cited several concerns with GameStop’s offer, including “the uncertainty regarding your financing proposal,” along with operational risks and the debt load that would result from the proposed transaction. GameStop didn’t immediately respond to a request for comment.
Total Retail's Take: Questions quickly arose last week after GameStop's sudden and unexpected bid to acquire eBay, both regarding the video game company's ability to finance the deal as well as the strategic rationale behind the proposed ownership structure.
“The Board, with the support of its independent advisors, has thoroughly reviewed your proposal and has determined to reject it,” Paul Pressler, the chairman of eBay’s board, wrote in a letter. “We have concluded that your proposal is neither credible nor attractive.”
eBay is in the midst of a turnaround effort and said it remains confident in its current management team, including CEO Jamie Iannone. The rejection letter states that its business has “delivered meaningful results” over the past several years. “We have sharpened our strategic focus, strengthened execution, enhanced our marketplace and seller experience, and consistently returned capital to shareholders,” eBay wrote.
Cohen said previously he was prepared to take the offer directly to shareholders if eBay declined to engage.
- Categories:
- Mergers & Acquisitions
- People:
- Ryan Cohen
Kristina Stidham is the digital content director at Total Retail and sister brands Women in Retail Leadership Circle and Women Leading Travel & Hospitality at NAPCO Media. She is passionate about digital media and handles video, podcast and virtual event production for all brands. You can often find her at WIRLC, TR, WLT&H or industry events with her camera and podcasting equipment—or at home on Zoom—recording interviews with thought leaders and business executives.
Kristina holds a B.A. in Media Studies and Production from the Temple University Klein College of Media and Communication in Philadelphia. Go Owls! When she's not in the office, she loves to go on long walks, sing around the house, hangout with her family and two pet guinea pigs, and travel to new places.
