GameStop launches $56 bln bid for eBay, lines up TD Bank financing

GameStop has made an unsolicited offer to buy eBay for about $56 billion in cash and stock, a bold move by CEO Ryan Cohen to acquire a company several times larger than his own. The proposal values eBay at roughly $125 per share, a premium of about 20% to its recent trading price, GameStop said. GameStop has built a stake of roughly 5% in eBay and secured a nonbinding “highly confident letter” from TD Bank for about $20 billion in debt financing to support the bid, which would be split evenly between cash and stock. However, the financing package highlights a significant gap. Even when combine

GameStop has made an unsolicited offer to buy eBay for about $56 billion in cash and stock, a bold move by CEO Ryan Cohen to acquire a company several times larger than his own.

The proposal values eBay at roughly $125 per share, a premium of about 20% to its recent trading price, GameStop said.

GameStop has built a stake of roughly 5% in eBay and secured a nonbinding “highly confident letter” from TD Bank for about $20 billion in debt financing to support the bid, which would be split evenly between cash and stock.

However, the financing package highlights a significant gap. Even when combined with roughly $9 billion in available cash, the funds fall well short of the $56 billion offer. Cohen said the company could issue additional stock to bridge the shortfall.

Cohen also told CNBC he has not yet contacted eBay’s management, saying “We are just starting,” underscoring the early-stage nature of the approach and the potential for a hostile bid. He has said the deal could help turn eBay into a “legit competitor to Amazon.”

Investor and GameStop chairman Ryan Cohen. /Wikipedia

Shares of eBay rose following the news, while GameStop’s stock fell about 10% amid investor concerns over funding and execution risks.

The deal would mark a rare attempt by a smaller company to acquire a significantly larger rival. GameStop’s market value is approximately $12 billion, compared with eBay’s roughly $46 billion.

eBay said it had received the proposal and would review it, but did not provide further comment.

Analysts said the transaction faces significant hurdles, including financing, dilution from potential stock issuance, integration risks and shareholder approval.