GameStop Eyes Hostile Tender Offer After eBay Rejects $56B Bid
GME•GameStop CEO Ryan Cohen has proposed a $56 billion unsolicited takeover of e-commerce firm eBay, offering $125 per share split equally between cash and stock, tapping $9.4 billion in cash reserves and a $20 billion debt facility. Rejection by eBay’s board raises the likelihood of a hostile tender offer despite financing doubts.
1. Takeover Bid Details
GameStop CEO Ryan Cohen offered to acquire eBay for $125 per share, valuing the company at $56 billion. The proposal was split evenly between cash and GameStop stock and was accompanied by Cohen’s offer to join eBay’s management team.
2. Financing Structure
Half of the cash portion would draw on GameStop’s $9.4 billion cash reserves, while a non-binding commitment letter from TD Securities could provide up to $20 billion in debt financing, contingent on securing investment-grade credit ratings.
3. Hostile Tender Offer Potential
With eBay’s board rejecting the unsolicited bid as “neither credible nor attractive,” Cohen could pursue a hostile tender offer directly to shareholders. Success would hinge on persuading institutional investors such as Vanguard, BlackRock and State Street, which collectively own over 22% of eBay’s stock.
4. Analyst Reactions and Market Implications
Industry analysts express skepticism over GameStop’s ability to secure sufficient financing and eBay shareholders’ willingness to support a takeover. eBay’s strong first-quarter earnings and 32% share price gain this year underscore the premium required for any successful bid.
