GameStop CEO Ryan Cohen doubles down as eBay rejects his $56 billion takeover bid
eBay has essentially rejected GameStop CEO Ryan Cohen’s unsolicited offer to acquire the marketplace giant, calling the deal “neither credible” nor attractive. On the other end of the spectrum, Ryan Cohen is adamant about acquiring the company, despite lacking the funds to do so in the first place. In his own words, “I’m not going away. I’m a pain in the ass.”
eBay has flat-out rejected GameStop’s $56 billion takeover offer and said it has no plans to sell the marketplace. This decision came right after eBay’s board, along with financial and legal advisors, spent several days reviewing GameStop CEO Ryan Cohen’s proposal.
A letter was sent to Cohen and later released publicly, in which eBay plainly explained that the marketplace is thriving without any outside backing and that the financial aspects of the deal look quite shaky. Furthermore, combining the two companies would create excessive debt and increase risk, something that is already worrying investors such as Michael Burry, who correctly predicted the 2008 financial crisis. eBay’s board wrote:
“eBay is a strong, resilient business that has delivered meaningful results over the past several years. We have sharpened our strategic focus, strengthened execution, enhanced our marketplace and seller experience, and consistently returned capital to shareholders.”
The board continued, “With its differentiated global marketplace and a clear strategy, eBay’s board is confident that the company, under its current management team, is well positioned to continue to drive sustainable growth, execute with discipline, and deliver long-term value for our shareholders.”
Meanwhile, Cohen isn’t taking no for an answer, having publicly announced his plans to acquire the company. Speaking to the Financial Times, he said, “The more eBay fights me, the more I’m not going to take no for an answer. I’m not going away. I’m a pain in the ass.”
On paper, GameStop offered eBay shareholders $125 per share,i.e., a 20% premium at the time, with a 50-50 split between cash and new GameStop stock. That would give eBay investors a 70% stake in the hypothetical merged company, with Cohen as the CEO.
GameStop was looking to fund the $28 billion in cash using $9 billion of its own liquidated cash holdings alongside $20 billion in debt financing from TD Securities.
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