GameStop submits $56 billion unsolicited bid to acquire eBay

GameStop Corp submitted an unsolicited offer Sunday to acquire eBay Inc for approximately $56 billion in a mix of cash and stock.

Chief Executive Ryan Cohen proposed $125 per share, a 20% premium to eBay's Friday closing price, after accumulating a 5% stake in the e-commerce platform. The company secured a commitment from TD Securities for up to $20 billion in debt financing to support the transaction.

GameStop holds about $9.4 billion in cash reserves as of its latest quarter, positioning it to fund half the deal outright with the balance through new shares. Cohen outlined plans to realize $2 billion in annual cost savings within 12 months post-close by streamlining sales, marketing and operations.

The bid leverages GameStop's 1,600 physical stores as fulfillment centers and live sales venues for eBay listings, aiming to challenge Amazon's dominance in resale and collectibles. Cohen confirmed readiness to launch a proxy fight if eBay's board rejects the non-binding proposal.

eBay shares rose 5% Monday to a record high, while GameStop stock declined 10% amid dilution concerns from the stock component. Retail investors amplified the offer across social platforms, reigniting meme stock enthusiasm from 2021 rallies.

Analysts questioned execution feasibility given GameStop's $12 billion market value versus eBay's $46 billion scale. Observers noted overlapping collectibles focus but highlighted integration risks and regulatory scrutiny.

Financing markets responded with tighter spreads on GameStop debt, as banks priced in prolonged negotiations. eBay confirmed receipt of the proposal and pledged review focused on shareholder value.

Cohen tied his compensation to the combined entity's performance, forgoing prior incentives upon deal completion.