GameStop targets eBay in $56B takeover bid, sees path to rival Amazon

GameStop has proposed acquiring eBay in a cash-and-stock deal valued at roughly $56 billion, in a high-stakes push to expand beyond its core retail business and reshape a major online marketplace.

CEO Ryan Cohen said he sees a path to turn eBay into a serious competitor to Amazon, telling The Wall Street Journal the platform “could be a legit competitor” to the e-commerce giant.

The company is offering $125 per share, a premium of about 46% compared with where eBay traded before GameStop began building its stake earlier this year. The bid is non-binding, meaning discussions may not result in a transaction.

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GameStop said it has already accumulated roughly a 5% stake in eBay and plans to finance the deal using its approximately $9 billion cash position along with up to $20 billion in outside financing it says it has secured.

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Central to the pitch is a strategy to combine GameStop’s physical retail footprint with eBay’s online platform. The company said that its roughly 1,600 U.S. stores could serve as hubs for product authentication, returns, order fulfillment and live shopping experiences.

To support that strategy, GameStop argued that eBay has underperformed relative to its spending, pointing to minimal user growth despite roughly $2.4 billion in annual marketing costs.

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The company said it could strip out about $2 billion in annual costs within a year of closing, primarily through cuts to marketing, product development and corporate overhead — reductions it says would materially boost earnings in the first year after a deal.

EBay said its board and financial advisers would review the unsolicited proposal, adding that it had no prior discussions with GameStop before receiving the offer. The company said it would evaluate the bid with a focus on shareholder value and GameStop’s ability to deliver a binding transaction.

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If completed, Cohen would lead the combined company, according to the proposal. It remains unclear whether the companies will enter formal negotiations.