GameStop makes $55.5B takeover offer for eBay
6 hours ago
- #Retail
- #M&A
- #E-commerce
- GameStop makes a $55.5bn cash and stock offer to buy eBay, valuing eBay at $125 per share.
- CEO Ryan Cohen plans $2bn in cost savings within a year post-deal and will take the bid to shareholders if eBay's board rejects it.
- GameStop, known for its meme stock craze during COVID-19, has seen improved profits but falling sales, with a market valuation around $11.9bn.
- eBay, founded in 1995, has seen its user base shrink from 175 million in 2018 to 136 million amid competition from Amazon.
- Under the deal, Cohen would become CEO of the combined company with compensation tied solely to performance, receiving no salary or bonuses.
- GameStop secured a commitment for $20bn in debt financing from TD Securities to support the acquisition.
- Cost cuts would target eBay's sales and marketing division, criticized for failing to attract users despite strong brand recognition.
- Analysts question the offer, noting it would burden eBay with GameStop's debt and may not create a strong combined entity.
- Shares in eBay rose over 13% in after-hours trading on news of the offer, while GameStop gained around 4%.
- Cohen sees synergy in using GameStop's 1,600 U.S. outlets as a national network for eBay's live commerce and operations.