GameStop Bids $125 Per Share for eBay in $55.5B Offer with $20B Debt
EBAY•GameStop proposed to buy all eBay shares for $125 each, valuing the company at $55.5 billion in a half-cash, half-stock deal enabled by $9.4 billion cash and $20 billion debt financing. The plan aims to cut $2 billion in annual costs and boost eBay’s EPS from $4.26 to $7.79.
1. Unsolicited Bid Details
GameStop proposed to acquire all outstanding eBay shares at $125 apiece, valuing the company’s undiluted equity at $55.5 billion. The non-binding offer tops eBay’s $104.07 closing price by 20% and reflects the 5% position GameStop has amassed via derivatives and direct holdings.
2. Financing and Execution Plan
The transaction would draw on GameStop’s $9.4 billion cash reserve and up to $20 billion in committed debt financing. CEO Ryan Cohen signaled readiness for a proxy fight and plans to assume the merged group’s leadership with performance-based compensation.
3. Cost-Saving and Synergy Projections
Cohen’s proposal aims to eliminate $2 billion in annual expenses across sales, marketing, product development and administration. Projected cost cuts could raise eBay’s diluted EPS from $4.26 to $7.79 within a year of closing.
4. Market Reaction and Analyst Views
eBay shares jumped about 13% in after-hours trading but remained below the $125 offer price. Market skepticism centers on deal completion odds and whether the strategic rationale improves on eBay’s ongoing turnaround.
