GameStop Makes Unsolicited $56 Billion Takeover Offer for eBay

Unsolicited Takeover Bid

GameStop has made an unsolicited takeover offer to acquire e-commerce firm eBay for approximately $56 billion. The video game retail chain confirmed the bid to the BBC on Sunday.

According to CEO Ryan Cohen, the offer consists of a combination of cash and stock. The proposal values eBay at $125 per share, which represents a premium of approximately 20% over the company's previous closing price.

Strategic Objectives

In a statement to the Wall Street Journal, Ryan Cohen said he believes there is potential to transform eBay into a significantly larger competitor to Amazon. Cohen stated that such a move could make the company "worth hundreds of billions of dollars".

To prepare for the bid, GameStop has built a stake of approximately 5% in eBay. Other reports indicate the company had been quietly accumulating shares ahead of the potential offer.

Financial Context and Compensation

Analysts have noted the scale of the bid relative to GameStop's size, observing that eBay's market value is four times that of GameStop. However, reports indicate that GameStop currently holds $9 billion in cash.

This move follows a compensation package unveiled in January for Ryan Cohen worth roughly $35 billion. This package is contingent upon a turnaround that requires Cohen to increase GameStop's market capitalization to $100 billion and achieve $10 billion in cumulative performance EBITDA.

Cohen previously told the Wall Street Journal that he sought a "big" deal that would ultimately be "either going to be genius or totally, totally foolish".

Potential Next Steps

If eBay's leadership is not receptive to the unsolicited offer, Cohen may choose to take the proposal directly to eBay's shareholders. Some reports suggest an offer could have been submitted as early as this month.

Neither eBay nor Ryan Cohen immediately responded to requests for comment from Reuters.