EBay Rejects Ryan Cohen's $55.5 Billion Bid, Citing Financing and Governance Risks
Updated
Updated · Business Insider · May 12
EBay Rejects Ryan Cohen's $55.5 Billion Bid, Citing Financing and Governance Risks
19 articles · Updated · Business Insider · May 12
$55.5 billion was the value of Ryan Cohen's unsolicited cash-and-stock offer that eBay formally rejected Tuesday, saying the GameStop CEO's proposal was not credible or attractive.
Six board concerns drove the decision, including uncertainty around financing, risks to eBay's long-term growth and profitability, leverage and operational strain in a combined company, and GameStop's governance and executive incentives.
GameStop had offered $125 a share, pointing to about $9.4 billion in cash and a TD Securities letter for up to $20 billion, while Cohen claimed he could cut $2 billion in annual costs within 12 months.
Shares fell after the rejection—GameStop dropped about 5% in premarket trading and eBay slipped roughly 1%—as scrutiny intensified over how a company worth about $10 billion could buy one valued near $50 billion.
The rebuff leaves eBay backing its standalone strategy, while Cohen had said last week he would keep doing whatever was needed to buy the business.
After rejecting a $56B offer, how will eBay prove to shareholders that its standalone plan is better?
Was Ryan Cohen’s audacious bid a real plan for a retail empire or just an elaborate publicity stunt?