eBay has rejected an unsolicited $56 billion takeover bid from GameStop, describing the proposal as neither credible nor attractive. The offer, led by GameStop CEO Ryan Cohen, was valued at $125 per share in a mix of cash and stock. In a letter to Cohen, eBay Chairman Paul Pressler stated that the board believes the company is a strong, resilient business and is well-positioned under its current management to drive sustainable growth and deliver long-term value for shareholders.
GameStop pursued the acquisition to better compete with online retail giant Amazon, suggesting that its approximately 1,600 U.S. stores could serve as drop-off and shipping locations. The proposal also envisioned live sales broadcasts of eBay products from GameStop locations. However, the eBay board and various analysts questioned the strategic rationale and the retailer's ability to finance the deal. Financing suggestions included a $20 billion TD Securities commitment letter and the sale of old store signs on the eBay platform.
GameStop currently holds a 5% stake in eBay, having begun accumulating shares in February. While the board has formally rejected the bid, CEO Ryan Cohen has hinted that he may take the offer directly to eBay shareholders. Following the announcement of the rejection on Tuesday, GameStop's stock fell 4% before the market open.