EBay rejects GameStop's $56 billion takeover bid, calling it 'neither credible nor attractive'

In a significant move, eBay has turned down GameStop's bold proposal to acquire the online marketplace for $56 billion. The company labeled the unsolicited bid as 'neither credible nor attractive.' Last week, GameStop CEO Ryan Cohen revealed his plan to purchase eBay, proposing a deal that would involve $125 per share in a combination of cash and stock. The disparity in size between the two companies is notable. eBay boasts a market capitalization exceeding $48 billion, while GameStop's stands at approximately $10.3 billion. Paul Pressler, eBay's board chairman, confirmed in a letter that the board, alongside its independent advisors, thoroughly evaluated the offer and ultimately decided to reject it, citing concerns over its credibility. In the rejection, eBay highlighted specific worries related to GameStop's financing proposal, operational risks, and the debt that would arise from the potential deal. Although Cohen claimed that GameStop had secured a $20 billion financing commitment from TD Securities and mentioned that the company holds around $9 billion in cash, the financial gap is still considerable. Moreover, many financial analysts on Wall Street expressed skepticism regarding the merger, pointing out a lack of significant synergies between eBay and GameStop. In a somewhat contentious appearance on CNBC's 'Squawk Box,' Cohen provided limited details about the financing strategy for the acquisition. He stated, 'We are offering half cash, half stock, and we have the ability to issue stock in order to get the deal done.' Further information about the offer can be found on GameStop's website, leaving the industry curious about the next steps.