eBay Board Rejects GameStop’s $56B Bid at $125, Citing Financing Risks
eBay’s board unanimously rejected GameStop’s unsolicited $56 billion bid to buy eBay shares at $125 each, citing financing uncertainty, valuation concerns and risks around debt burden and governance. The proposal included $20 billion in debt financing, $9.4 billion cash and a 20% premium over eBay’s closing price.
1. eBay Board Rejects $56B Bid
In a unanimous decision, eBay’s board declared GameStop’s unsolicited $56 billion takeover proposal neither credible nor attractive, citing doubts over the financing plan’s viability, concerns about increased debt burden, operational risks and questions around governance structure and executive incentives within the proposed merger.
2. Bid Structure and Financing
In its offer unveiled last week, GameStop proposed buying eBay shares at $125 each—a 20% premium—using a combination of cash and stock. The funding package included a $20 billion commitment from TD Securities and $9.4 billion cash held by GameStop, though questions remained over sources for the remaining financing.
3. Potential Next Moves
Following the board’s rebuff, GameStop’s founder indicated he may bypass the board and appeal directly to eBay shareholders for support. The bid has already triggered investor skepticism, with some selling positions amid concerns the merger would leverage eBay to roughly 7.7 times debt to EBITDA.