GameStop Seeks to Buy eBay for $56 Billion in Challenge to Amazon, WSJ Says

GameStop is seeking to acquire eBay for $56 billion, The Wall Street Journal reported on May 3.

Ryan Cohen, GameStop’s chief executive officer, told the Journal that the company has built a roughly 5% stake in eBay and proposed buying the company for $125 a share in a mix of cash and stock. The offer represents about a 20% premium to eBay’s previous regular-session close of $104.07.

Cohen said eBay could become a competitor to Amazon. He added that eBay could grow into a company worth hundreds of billions of dollars and deserves a higher valuation than it currently receives. Combining GameStop’s brick-and-mortar stores with eBay’s online marketplace would also create synergies that could expand the business, he said.

GameStop has $9 billion in cash, according to Cohen. It has also secured a commitment from TD Bank for $20 billion in debt financing to support the eBay takeover.

If eBay rejects the proposal, GameStop plans to take its case directly to shareholders in a proxy fight, Cohen said. A deadline to nominate board candidates for the annual shareholder meeting scheduled for June has already passed, however, potentially complicating that effort.

Investors are initially viewing the odds of a deal as low. GameStop’s market capitalization stands at about $12 billion, compared with eBay’s $46 billion, making it a David-and-Goliath battle, the Journal said.

After the Journal’s report, both stocks surged in Nasdaq after-hours trading. eBay jumped 11.82% to $116.37, while GameStop climbed 6.33% to $26.53.

Lee Mi-ah, Hankyung.com reporter, mia@hankyung.com