eBay rejects GameStop’s $56B bid, cites financing doubts

eBay’s board rejected GameStop’s $125-per-share, $56 billion takeover proposal, calling the cash-and-stock offer “neither credible nor attractive” and saying the financing path remained unclear. The decision raises the prospect of a hostile contest if Ryan Cohen takes the proposal directly to eBay shareholders.

Directors pointed to the size gap between the companies as a central concern: GameStop’s market value is roughly one-quarter that of eBay. The board highlighted uncertainty about how a transaction of this scale would be funded and warned that an equity-heavy deal structure could dilute eBay shareholders.

Cohen has included a $20 billion debt commitment letter from TD Bank as part of his financing plan, but the board and credit analysts questioned whether that and other measures would be sufficient. Moody’s indicated the proposed merger would be credit-negative for eBay because the combined company would likely carry higher leverage and face weaker credit metrics.

Beyond financing, eBay’s directors flagged operational and strategic risks in combining two retailers with limited overlap in business models and customer bases. The board noted integration challenges in folding GameStop’s operations into eBay’s platform and reiterated concerns about shareholder dilution under the proposed stock-heavy consideration.

Cohen built GameStop’s roughly $8.8 billion cash position over the past year through equity sales and convertible bond offerings. Last summer the company bought 4,710 bitcoin and for a time was one of the largest public holders of the asset. Cohen has described his consumer-focused ambitions as “way more compelling than bitcoin,” and GameStop recently moved its entire bitcoin position to Coinbase Prime, prompting speculation that the cryptocurrency could be sold to help fund a bid.

The offer has reignited retail investor interest in GameStop shares, which rose in a meme-style rally after the proposal emerged. Cohen has indicated he may bypass eBay’s board by launching a tender offer or seeking a special meeting to put the $125-per-share proposal before eBay shareholders. If he proceeds, owners would be asked to vote on a deal the target’s directors have formally rejected.

The next few weeks will determine whether Cohen files a tender offer, secures additional financing commitments or revises the offer to address the board’s concerns.