GameStop makes bold $US56 billion play for eBay
US video game retailer GameStop has offered to buy eBay for about US$56 billion ($78 billion) in a cash-and-stock deal, with CEO Ryan Cohen saying he is prepared to take the offer directly to shareholders if eBay’s board is unsympathetic.
GameStop, which was once listed on the stock exchange and rose to fame during a meme stock craze five years ago, has offered to pay US$125 ($A173) per share in a 50-50 mix of cash and stock, Cohen said in a letter to eBay’s board.
The bid represents a premium of about 20 percent based on eBay’s Friday close.
EBay’s market capitalization is nearly four times larger than GameStop, making its acquisition bid an ambitious undertaking.
In the letter seen by Reuters, Cohen said the US video game retailer already owns a five per cent stake in eBay through shares and derivatives.
The unsolicited bid to buy the US online marketplace was first reported by the Wall Street Journal, citing an interview with CEO Cohen, who is also GameStop’s largest investor.
Cohen, who is pushing to increase the struggling video game retailer’s market value more than tenfold, told the Journal that putting eBay and GameStop under one roof would create huge opportunities to increase earnings and reduce costs.
“Amazon could have a legitimate competitor,” Cohen told the Journal about eBay.
In his letter, Cohen said GameStop would cut US$2 billion ($A2.8 billion) from eBay’s annual costs over 12 months, which would lead to an increase in the company’s earnings per share.
He added that GameStop’s 1,600 U.S. locations will provide eBay with a national network for authentication, pickup, order fulfillment and live trading.
He told the Wall Street Journal that he was prepared to launch a proxy fight if eBay’s board did not approve of the offer.
EBay did not immediately respond to Reuters’ requests for comment on GameStop’s offer.
“EBay should and will be worth a lot more money,” Cohen said in the interview. “I intend to turn eBay into something worth hundreds of billions of dollars.”
Dubbed the “meme king” by retail traders for his role in the 2021 meme stock craze and outsized influence among retail investors on social media, Cohen has built a reputation for bold, unconventional bets that can move markets.
According to the WSJ report, Cohen said he had already lined up financial commitments, including a letter of commitment from TD Bank amounting to about US$20 billion ($28 billion) in debt, and could seek support from outside investors, including Middle East sovereign wealth funds, for the deal.
Cohen said he will serve as chief executive of the combined company following the closing.
GameStop had a market capitalization of about US$12 billion ($17 billion) at the close of business on Friday, while eBay’s market cap was approximately US$46 billion ($64 billion).
Its shares are up 32.1 percent and 19.5 percent, respectively, in 2026.
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