EBay rejects GameStop’s $56 billion takeover bid

In Short:
– eBay’s board rejected GameStop’s $56 billion takeover proposal due to financing and operational concerns.
– GameStop’s shares have lost all prior gains after the failed bid, despite having $9 billion in cash.

EBay’s board has rejected GameStop’s unsolicited $56 billion takeover proposal.Chairman Paul Pressler stated in a letter to CEO Ryan Cohen that the offer is “neither credible nor attractive,” citing concerns about financing and operational risks.

GameStop deal fails

GameStop’s offer included $125 per share in cash and stock for eBay shares, which were valued at around $104 prior to the proposal.

GameStop’s market value is approximately $11 billion, compared to eBay’s $45 billion.

While investors initially responded positively to the news, shares of both companies experienced declines after the initial excitement.

Cohen’s CNBC appearance raised confusion, as he provided little detail on financing the deal despite repeated inquiries.

He mentioned a commitment letter from TD Bank to contribute up to $20 billion in debt financing for the acquisition.

However, TD Bank’s commitment relies on the combined company attaining investment-grade ratings.

Despite having $9 billion in cash, analysts questioned whether GameStop could cover financing gaps.

After the proposal’s public announcement, the prediction-markets platform Polymarket reported a significant drop in Cohen’s chances of success.

Cohen expressed willingness to take an offer directly to shareholders if eBay remains unresponsive.

He also jokingly posted on X about creating an eBay account to sell items, including a pair of his socks.

Currently, eBay shares are trading at $108.13, well below Cohen’s initial offer price.