eBay rejects GameStop's $56B unsolicited offer as "neither credible nor attractive"

[Shawn Knight]

What just happened? eBay has rejected GameStop's $56 billion acquisition offer, and the company wasn't shy in detailing exactly why it decided to pass. In a strongly worded response sent to GameStop CEO Ryan Cohen, eBay's Board Chairman Paul S. Pressler said the offer was "neither credible nor attractive."

In the letter, which was also shared online, the executive said the board and its independent advisors thoroughly reviewed GameStop's proposal before making a decision.

Pressler said the review committee took into account numerous factors including eBay's standalone prospects, the uncertainty surrounding GameStop's financial proposal, the impact the deal would have on eBay's long-term growth and profitability, the operational risks and leadership structure of the combined entity, the implications of the deal on valuation, and GameStop's executive and governance incentives.

eBay isn't the only one that felt GameStop's offer was a bit ambitious. At the time of proposal, GameStop had a market value of around $12 billion compared to eBay's $46 billion valuation. GameStop offered $125 per share, split half and half between cash and GameStop stock. Shares in eBay were trading at around $104 prior to the offer, and sit at $108.18 as of this writing. GameStop's stock is down 1.25% on the news, trading at $22.88 as of writing.

GameStop said it intended to fund the offer using cash and liquid investments on its balance sheet combined with third-party financing. In reality, it's unclear if GameStop would have been able to secure the funds needed to make the deal happen.

Some investors, like Michael Burry, believe a deal would weigh down GameStop with debt and dilute shareholders.

It's unclear what might happen next. As CNBC highlights, GameStop's chief executive could take an offer directly to eBay shareholders if he wants to pursue the matter further.

eBay seems like an unusual fit for GameStop, but perhaps there are synergies to be realized. GameStop operates more than 600 physical retail stores in the US. If they could find a way to leverage those locations to help eBay, perhaps the combined entity could better challenge rivals like Amazon.

Permalink to story:

eBay rejects GameStop's $56B unsolicited offer as "neither credible nor attractive"

 

[The Talking Tech]

"neither credible nor attractive"

That was exactly my initial thought!

That GameStop CEO in interviews wasn't even able to convince the news anchor.

 

[Anton Longshot]

LOL what offer?
THEY HAVE NO MONEY!

I'll match their offer + $10 (I don't have money either).

 

[Plutoisaplanet]

LOL what offer?
THEY HAVE NO MONEY!

I'll match their offer + $10 (I don't have money either).

It sounds like Gamestop has around a billion times more money than you lol:

GameStop CEO Ryan Cohen said GameStop had lined up a $20 billion financing commitment from TD Securities, part of TD Bank, and the company has about $9 billion in cash on hand, but the funding gap remains substantial.

 

[Megalomaniac]

I should buy Berkshire Hathaway...

 

[Theinsanegamer]

It sounds like Gamestop has around a billion times more money than you lol:

$20 billion in financing, yeah that's the action of a company with money, LMFAO.

 

[Beerfloat]

It sounds like Gamestop has around a billion times more money than you lol:

Actually, TD has not even committed to providing that 20 billion for Cohen's wild flight of fancy. All they've done so far is state that they are 'confident' that they would be able to put together such a package if asked.

Also, Gamestop does not actually have that 9 billion in cash on hand. It has 6.3 and some other more or less liquid assets.

Gamestop would need to issue twice as much additional stock as its entire current float just to bridge the missing funding, which - oops - management isn't allowed to do without shareholder approval. Current holders are probably not lining up to dilute their ownership.

It's crazy this is getting any traction in the media. It's total nonsense. Like almost everything related to Gamestop.

 

[Anton Longshot]

It sounds like Gamestop has around a billion times more money than you lol:

And they're just as likely to buy eBay as I am.

Which is good as I like eBay and I would have to walk if GameStop bought them.

 

[Plutoisaplanet]

Actually, TD has not even committed to providing that 20 billion for Cohen's wild flight of fancy. All they've done so far is state that they are 'confident' that they would be able to put together such a package if asked.

Also, Gamestop does not actually have that 9 billion in cash on hand. It has 6.3 and some other more or less liquid assets.

Gamestop would need to issue twice as much additional stock as its entire current float just to bridge the missing funding, which - oops - management isn't allowed to do without shareholder approval. Current holders are probably not lining up to dilute their ownership.

It's crazy this is getting any traction in the media. It's total nonsense. Like almost everything related to Gamestop.

It probably just is a publicity stunt. But the fact remains that 6 billion dollars of liquid assets is still about a billion times more than $10 lol.

And they're just as likely to buy eBay as I am.

Which is good as I like eBay and I would have to walk if GameStop bought them.

It’s true that it’s not very likely, but 16% odds is not 0% either https://polymarket.com/event/will-gamestop-acquire-ebay

 

[MaXtor]

This was expected by everyone, including GameStop's CEO (he said so in his interview with TBPN). eBay’s board was essentially offered to have half of their already awarded stock paid out to them and to receive the other half in GameStop stock. They would not only stop receiving their free stock rewards and compensation, but also be out of a job. They are incentivized to say no.

Now the decision will go to shareholders, which effectively means BlackRock, State Street, and Vanguard will decide what they believe is best for their investment in both GameStop and eBay.

 

[ZedRM]

Who saw this coming? Anyone? Oh right, lot's of us!

Now the decision will go to shareholders, which effectively means BlackRock, State Street, and Vanguard will decide what they believe is best for their investment in both GameStop and eBay.

No was the final decision. Such a buyout would never pass regulatory examination anyway, so debate is pointless.

Besides can anyone else think of a worse thing than GameStop merging with Ebay? What the world doesn't need is GameStop encrapifying Ebay with is brainless business models and methods. It would be a complete disaster.