GameStop has proposed to acquire eBay in an unsolicited cash-and-stock deal worth approximately $56 billion, targeting a company nearly four times its own size. CEO Ryan Cohen disclosed the offer in a letter to eBay’s board and is reportedly prepared to take the bid directly to shareholders if the board proves unreceptive.
The deal structure
According to Reuters, the offer values eBay at $125 per share, a roughly 20% premium to the company’s closing price last Friday, structured as an even 50-50 split between cash and stock. Cohen confirmed that GameStop has already accumulated a roughly 5% stake in eBay through shares and derivatives.
To finance the deal, Cohen said he has secured a commitment letter from TD Bank for around $20 billion in debt financing. He added that he may also seek capital from external investors, including Middle Eastern sovereign wealth funds.
The pitch: a real challenger to Amazon
Cohen framed the acquisition as a transformational play, believing that a combined GameStop-eBay could become a serious rival to Amazon. “It could be a legit competitor to Amazon,” he said. “eBay should be worth – and will be worth – a lot more money. I’m thinking about turning eBay into something worth hundreds of billions of dollars.”
As part of his vision, Cohen suggested GameStop’s physical retail locations could serve as drop-off and authentication points for items sold by eBay sellers. He also indicated he sees untapped potential in live commerce and real-time video shopping experiences as a growth area for eBay.
Should the deal close, Cohen said he would step into the role of CEO of the combined company. He warned that if eBay’s board is unreceptive to the proposal, he is prepared to take the offer directly to shareholders through a proxy fight.
The move marks a bold strategic pivot for GameStop, a brick-and-mortar video game retailer that’s way past its heyday. The company briefly rose to fame during the meme-stock frenzy of 2021 and currently holds a market capitalization of around $12 billion, compared to eBay’s roughly $46 billion.