GameStop has announced a bid to buy eBay for $55.5 billion.
GameStop has announced a bid to buy eBay for $55.5 billion.
The long running video game retailer, which the largest of its kind worldwide, has confirmed it submitted a “non-binding proposal” to buy 100 percent of the e-commerce platform – which launched in 1995 and allows users to make sales via online auctions or “buy it now sales” – at $150 per share in cash and stock, at 50 percent each.
GameStop already owns around 5 percent of eBay’s outstanding stock, having started buying stock in February this year.
Speaking to the Wall Street Journal, CEO Ryan Cohen said: “There is nobody who is more qualified, based on my experience, to run the eBay business.
“eBay should be worth – and will be worth – a lot more money. I’m thinking about turning eBay into something worth hundreds of billions of dollars.”
GameStop itself has a market cap of roughly $12 billion, while eBay’s is $46b.
Cohen noted that TD Bank is providing $20b in debt financing for the deal, with GameStop also able to provide $9b cash in hand.
According to the WSJ’s report, the company could turn to Middle East sovereign wealth funds and other outside funding to complete the deal.
In a press release, GameStop noted that, if the deal goes through, it will deliver annualised cost reductions of $2b within the first year.
Back in January, Cohen opened up about his plans for GameStop to buy another big company, but he was keen to try and boost GameStop’s fortunes.
He said at the time: “It’s ultimately either going to be genius or totally, totally foolish.”
GameStop confirms huge bid to buy eBay
