(May 12): eBay Inc rejected a US$56 billion ($71.25 billion) takeover offer from GameStop Corp chief executive officer Ryan Cohen, describing the unsolicited bid as “neither credible nor attractive”.
eBay’s board turned down the offer after taking into account “uncertainty” around the financing plan, the operational risks involved and GameStop’s governance, chairman Paul Pressler said in a letter addressed to Cohen. Pressler also cited GameStop’s executive incentives and a takeover’s potential impact on eBay’s long-term growth.
A representative of GameStop did not respond to an emailed request for comments. The company’s shares fell about 3% as the markets opened in New York on Tuesday. eBay’s stock slipped about 2%.
The rejection sets the stage for a potential proxy fight to replace eBay’s board with one favourable to a deal. Cohen had previously said that he’s prepared to take his plan straight to shareholders should the board turn down his offer.
Cohen last week offered US$125 a share — consisting of 50% cash and 50% GameStop stock — to eBay shareholders. That was a 20% premium to the stock price the previous Friday’s close.
Cohen’s plan has been received by investors with scepticism. GameStop’s market value is about US$10 billion, less than a fourth of the value of eBay. The company has said it plans to borrow US$20 billion to help finance the acquisition. Cohen pledged to find US$2 billion in cost savings within 12 months of the deal closing and suggested that eBay CEO Jamie Iannone’s spending on marketing has been wasteful.
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In January, GameStop unveiled a compensation package for Cohen that would reward him with options on more than 171 million shares if he lifted GameStop’s market value to US$100 billion. Cohen has said he would take over a combined entity but get paid solely based on the performance of that company.
eBay’s online marketplace has 136 million users who spend about US$80 billion a year on the platform. The company’s 2025 revenue totalled US$11.6 billion, mostly from commissions. It also sells advertising and makes money processing payments.
GameStop operates about 2,200 retail stores in the US, France and Australia after shuttering 227 locations last year. The retailer generated US$3.6 billion in revenue in the 12-month period ending Jan 31, mostly from the sale of gaming hardware and collectibles.
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In his takeover bid, Cohen said GameStop’s 1,600 US stores could be used to authenticate collectibles sold on eBay as well as shipping centres for goods sold on the e-commerce platform.
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