eBay Rejects GameStop’s $55.5B Takeover Bid

eBay Chairman Paul S. Pressler notified GameStop CEO Ryan Cohen that the company’s board declined Cohen’s $55.5 billion takeover proposal. The board, with support from independent advisors, concluded after a review that it would reject the offer.

Pressler listed factors the board weighed: eBay’s standalone prospects, uncertainty over Cohen’s financing plan, the proposal’s potential effect on eBay’s long-term growth and profitability, leverage and operational risks, leadership structure for a combined company, valuation implications, and GameStop’s governance and executive incentives.

Pressler wrote that eBay is a ‘strong, resilient business’ that has delivered results in recent years. The letter noted the company has sharpened its strategic focus, improved execution, enhanced the marketplace and seller experience, and consistently returned capital to shareholders.

Cohen has argued the acquisition would make eBay a stronger competitor to Amazon and has proposed leadership and strategy changes to accelerate growth. He has indicated he may take his proposal directly to eBay shareholders if the board does not accept the bid.

The exchange creates the possibility of a proxy fight or a shareholder campaign if Cohen pursues a direct appeal to investors. For now, eBay’s board declined the offer and indicated it will continue executing its current strategy while serving millions of buyers and sellers worldwide.