eBay has rejected GameStop’s offer to buy it for $56 billion, calling it “neither credible nor attractive”, Bloomberg is reporting. The offer came last week, when GameStop said it would pay $125 per eBay share. Intriguingly, GameStop’s market value is about $11 billion, while eBay’s is $45 billion, so this is definitely a case of a small fish wanting to eat a much bigger one.
The GameStop bid is half cash and half GameStop stock, and represents a 20% premium over eBay’s current stock price. GameStop will have to borrow $20 billion to finance the acquisition, but when asked its CEO couldn’t explain exactly where the money would come from.
eBay has expressed concerns both about the financing of the deal and the debt related to it. If you’re wondering why GameStop would even attempt something like this, here’s an interesting tidbit – its current CEO, Ryan Cohen, could receive $35 billion in stock if he meets certain criteria including increasing GameStop’s market value to $100 billion, which such an acquisition could definitely help with.