A360
Key Takeaways✦ Atlas AI
01
GameStop offered $55.5 billion for eBay.
02
Bid values eBay shares at $125.
03
Analysts express skepticism on merger.
Atlas AI
GameStop has submitted an unsolicited $55.5 billion cash-and-stock offer to acquire e-commerce company eBay, according to a report by the BBC. The proposal values eBay at $125 per share, a $20 premium to its closing price on Friday.
GameStop chief executive Ryan Cohen said the deal would strengthen eBay’s position and could help it better compete with Amazon as GameStop looks to expand its own e-commerce footprint. He also said he was prepared to take the bid directly to shareholders if eBay’s board rejected it.
GameStop said the proposal includes a commitment letter from TD Securities to provide around $20 billion in debt financing. Cohen said he plans to cut eBay’s costs by $2 billion within a year of a deal being completed, largely through reductions in sales and marketing spending.
Analyst skepticism
Analysts questioned the strategic fit and feasibility of the proposal. Morgan Stanley said the two companies have “fundamentally different” business models, while Bernstein pointed to GameStop’s smaller balance sheet and said it would be “surprised if anything became of it.”
GameStop has a stock market valuation of about $11.9 billion, while eBay is valued at roughly four times that level, the repoSources said.
In Monday morning trading in New York, eBay shares rose 5.5% and GameStop shares fell by more than 4%.
eBay said it will consider the proposal.
