CEO of GameStop, Ryan Cohen has just officially proposed a massive $55.5 billion acquisition of eBay
According to Al Jazeera, GameStop Corp. has launched a massive $55.5 billion unsolicited bid to acquire e-commerce giant eBay Inc.. The proposal, announced by CEO Ryan Cohen, offers $125 per share, a 46% premium over eBay’s unaffected price in February, to be paid in a 50-50 split of cash and GameStop common stock.
The bold “David vs. Goliath” play comes from a company with a market capitalization of approximately $12 billion attempting to swallow a target valued at nearly $48 billion. GameStop revealed it has already accumulated a 5% economic stake in eBay.
Ryan Cohen, who would serve as CEO of the combined entity, intends to transform the online marketplace into a “legit competitor to Amazon”. The strategy hinges on two main pillars:
Operational Integration: Leveraging the company’s 1,600 physical U.S. retail locations as nodes for eBay’s authentication, fulfillment, and “live commerce”.
Aggressive Cost-Cutting: Cohen plans to slash $2 billion in annual expenses within 12 months, primarily by reducing eBay’s marketing and administrative overhead.
To fund the multi-billion dollar cash portion, GameStop intends to use its $9.4 billion cash reserve and has secured a “highly confident” letter for $20 billion in debt financing from TD Securities.
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