eBay has formally rejected a massive takeover attempt from GameStop, calling the proposed $56 billion acquisition ‘neither credible nor attractive’. The board raised doubts over GameStop’s ability to fund the deal and handle a company of eBay’s scale. It also warned that the merger could hurt long-term shareholder value. Notably, the offer included cash and stock but was considered too risky and structurally unclear.
The offer was pitched at around $125 per share and structured as a about 50-50 split between cash and GameStop stock, implying a premium of about 20% over eBay’s trading levels at the time. The rejection came after a detailed review by eBay’s board, along with external financial and legal advisors. In its official response letter to GameStop CEO Ryan Cohen, the company outlined several reasons for rejecting the proposal. These included uncertainty around financing, concerns about the operational risks of merging two very different businesses, and doubts about governance and leadership alignment in a combined entity. eBay also stressed that its current standalone strategy is already delivering steady performance and improving profitability, making a takeover unnecessary from its perspective.
At the center of eBay’s rejection was the question of financing. GameStop, with a market capitalization of around $10-12 billion, proposed acquiring a company valued several times larger, immediately raising doubts on Wall Street about credibility. The company pointed to about $9-10 billion in available cash and suggested it could raise up to $20 billion in debt financing through TD Securities, along with issuing new equity. But even together, this still did not cover the full cost of the deal, meaning GameStop would have to rely on non-binding commitments and optimistic capital assumptions instead of confirmed, secured financing.
At the same time, eBay’s board also highlighted operational and strategic concerns. The company argued that merging with GameStop would introduce unnecessary execution risk, given that the two firms operate in fundamentally different sectors. eBay is a global digital marketplace with over 130 million active buyers, while GameStop is primarily a physical retail chain undergoing restructuring. Even according to eBay, its current standalone strategy – focused on strengthening marketplace services, payments infrastructure, and high-margin collectables categories – was already delivering stable growth and improving returns to shareholders.
It is important to note that GameStop CEO Ryan Cohen had publicly framed the deal as an opportunity to cut costs and integrate eBay with GameStop’s retail footprint, claiming potential synergies worth billions in operational savings. Cohen also hinted that GameStop could pursue a hostile takeover if eBay refused to engage, potentially taking the offer directly to shareholders. This raised the possibility of a prolonged proxy battle rather than a negotiated acquisition.
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Ashutosh is a Senior Writer at The Tech Portal, largely reporting on new tech, and intersection of technology and business. Ashutosh’s career spans across nearly a decade of technology writing across multiple platforms and languages.
