EBay rejects GameStop takeover bid: ‘Neither credible nor attractive’

EBay rejected on tuesday GameStopIn its $56 billion takeover bid, it was stated that the unsolicited offer was “neither credible nor attractive”.

GameStop CEO Ryan Cohen announced an audacious bid for eBay last week, offering to buy the online marketplace for $125 per share in a cash-and-stock deal. EBay is much larger than the video game retailer, with a market cap of just over $48 billion, while GameStop’s is about $10.3 billion.

Paul Pressler, eBay’s executive chairman, wrote: “The board, with the support of its independent advisors, has reviewed your proposal in detail and has decided to reject it.” in a letter. “We have concluded that your offer is neither credible nor attractive.”

GameStop did not immediately respond to a request for comment.

EBay listed several concerns about GameStop’s offering, including “uncertainty regarding your financing offer,” operational risks and the debt burden that would result from the proposed transaction.

GameStop has lined up a $20 billion financing commitment from TD Securities, part of TD Bank, and the company has about $9 billion in cash on hand, but the financing gap is still significant, Cohen said.

Many Wall Street analysts were dismissive of the deal, citing a lack of meaningful synergies between the two companies. Cohen also made an awkward and at times combative appearance on CNBC’s “Squawk Box” and offered few details about how he would finance the deal.

“We are offering half cash, half stock, and we have the ability to issue stock to complete the deal,” Cohen said. “But full details of the offer are on our website. Let’s see what happens.”