eBay rejects GameStop's offer, calling it 'neither credible nor attractive'
Key takeaways
- Last week, Gamestop offered $125 a share to purchase e Bay, despite having a market value less than a quarter of eBay ($11 billion compared to $45 billion).
- eBay said that it reviewed the offer thoroughly and expressed concerns about financing and debt related to the deal.
- GameStop CEO Ryan Cohen could receive $35 billion in stock if he meets certain criteria, including increasing GameStop's market value to $100 billion, according to a report last week from The Wall Street Journal.
Cheng Xin/Getty Images e Bay has rejected Game Stop's unsolicited $56 billion takeover bid, calling it "neither credible nor attractive," according to a letter from e Bay chairman Paul Pressler seen by Bloomberg. That reaction may set in motion an attempt by Game Stop to take the offer directly to e Bay's shareholders or replace e Bay's board with one favorable to its offer via proxy fight.
Last week, Gamestop offered $125 a share to purchase e Bay, despite having a market value less than a quarter of eBay ($11 billion compared to $45 billion). The bid, consisting of half cash and half GameStop stock, represents a 20 percent premium over eBay's current stock price. GameStop plans to borrow $20 billion to help finance the acquisition but, when asked, CEO Ryan Cohen couldn't explain in detail where it would raise the additional capital required.
eBay said that it reviewed the offer thoroughly and expressed concerns about financing and debt related to the deal. In his letter, Pressler said that eBay was in a strong position, having executed a turnaround to better compete with rivals like Amazon and "consistently returning capital to shareholders."