eBay Rejects GameStop’s $55.5B Takeover Offer
eBay rejected GameStop unsolicited $55.5 billion half-stock, half-cash bid, calling it neither credible nor attractive and citing financing, leverage and operational risks.
eBay’s board on Tuesday rejected GameStop’s unsolicited $55.5 billion proposal, saying the offer was ‘neither credible nor attractive.’ Chairman Paul Pressler wrote directly to GameStop CEO Ryan Cohen after a ‘thorough review.’
The board expressed concerns about how the deal would be financed and the leverage and operational risks of combining the two companies. Pressler emphasized eBay’s status as an independent company and said the proposal lacked sufficient clarity for the board to recommend acceptance.
The letter highlighted recent company performance, stating: ‘eBay is a strong, resilient business that 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.’
The proposed transaction would have been roughly half stock and half cash and was publicly valued at $55.5 billion. That figure represented a premium to eBay’s market capitalization, which opened the day near $47 billion. GameStop’s market value traded intraday just above $10.3 billion.
Market reaction was muted. eBay shares were last quoted around $107.71, down about 0.4% on the day. The stock has risen about 24% year to date and more than 55% over the past year. GameStop shares traded near $22.99, down modestly and more than 18% below their level a year ago.
Following the bid’s announcement, investor Michael Burry disclosed he sold his entire GameStop position. Burry wrote on his Substack that the proposed transaction would have increased GameStop’s borrowings to levels incompatible with the investment thesis he had adopted.
GameStop began as a brick-and-mortar video game retailer and has expanded into collectibles and online sales. eBay operates a global online marketplace for buyers and sellers across many categories. eBay’s board concluded the proposed acquisition raised too many financial and operational uncertainties to recommend acceptance.
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