Despite GameStop quietly accumulating a 5% stake in eBay, the board labeled the bid ‘neither credible nor attractive’|Will Buckner|CC BY 2.0
Online marketplace eBay’s board of directors on Tuesday officially rejected an unsolicited acquisition proposal from GameStop this month. The bid had valued the company at around $56 billion.
Although GameStop had quietly built a 5% stake in eBay, the board labeled the offer “neither credible nor attractive,” citing severe concerns over financing and governance.
Analysts also questioned the financial structure behind the proposed deal. GameStop planned to fund the purchase using its $9.4 billion in cash, up to $20 billion in financing from TD Securities, and the remainder in common stock.
GameStop CEO Ryan Cohen further fueled doubts of the deal’s feasibility when he appeared unable to explain the financing during a CNBC interview.
eBay concluded its board letter saying it remains better positioned to grow as a standalone online marketplace.