GameStop Makes a $56 Billion Bid to Buy eBay
GameStop Corp. is proposing to buy eBay Inc. for about $56 billion in cash and stock, a bold attempt by CEO Ryan Cohen to take over a storied e-commerce name several times larger. The GameStop eBay acquisition $56 billion bid sent shockwaves through markets on Sunday, reviving memories of the meme-stock frenzy that first put the gaming retailer on Wall Street’s radar five years ago.
GameStop is offering to pay $125 a share in a 50-50 mix of cash and stock. Cohen said in a letter to eBay’s board that he was prepared to take the bid directly to shareholders should the board prove unreceptive. GameStop has already built up a 5% stake in eBay through shares and derivatives. The offer represents a 20% premium to eBay’s Friday close of $104.07, and a 46% premium to its closing price on February 4, the day GameStop began buying eBay stock.
Ryan Cohen Has $20 Billion in Financing Already Lined Up
The GameStop eBay acquisition $56 billion bid is not just ambition on paper. GameStop said it has secured a commitment from TD Bank to provide about $20 billion in debt financing to help bankroll the deal, and pledged to find $2 billion in annual savings within 12 months of closing and Also has about $9 billion in cash on hand, with reports suggesting it could seek additional outside funding, including from Middle East sovereign wealth funds, to bridge the remaining gap.
GameStop framed the move as an attempt to turn eBay into a direct competitor to Amazon and had a market value of just $12 billion compared to eBay’s $46 billion as of Friday, raising serious questions about the feasibility of the bid. There is no word yet on how eBay’s board is responding, and no deal guaranteed. But for Ryan Cohen, a man who turned a dying video game retailer into a Wall Street phenomenon, the audacity of the offer is entirely on brand.
