GameStop makes bold $56 billion play for eBay, ready to go hostile

By Mihika Sharma and Akanksha Khushi

May 3 (Reuters) - GameStop projected connected Sunday to bargain eBay Inc for astir $56 cardinal successful a cash-and-stock deal, with CEO Ryan Cohen saying helium was prepared to instrumentality the bid straight to shareholders should eBay's committee beryllium unreceptive.

GameStop - erstwhile a banal marketplace minnow that changeable to fame ‌during a meme-stock frenzy 5 years agone - is offering to wage $125 a stock successful a 50-50 premix of currency and stock, Cohen said successful a missive ‌to eBay's board. Based connected eBay's Friday close, the bid represents a premium of astir 20%.

Ebay has a marketplace capitalization astir 4 times larger than GameStop, making the buyout bid an ambitious attempt.

The U.S. videogame retailer has already ​built up a 5% involvement successful eBay done shares and derivatives, Cohen said successful the letter, which was seen by Reuters.

Its unsolicited connection to bargain the U.S. online marketplace was archetypal reported by the Wall Street Journal, citing an interrogation with CEO Cohen, besides GameStop's largest investor.

Cohen, who is pushing to boost the struggling videogame retailer's marketplace worth much than tenfold, told the Journal that putting eBay and GameStop nether 1 extortion would make immense opportunities to amended net and chopped costs.

"It could beryllium a legit rival to Amazon," Cohen said astir eBay to the Journal.

Cohen ‌said successful the missive that GameStop would chopped $2 cardinal of eBay's ⁠annualized costs wrong 12 months of close, resulting successful an summation successful the company's net per share.

GameStop's 1,600 U.S. locations would springiness eBay a nationalist web for authentication, intake, fulfillment, and unrecorded commerce, helium added.

He told the Wall Street Journal helium was prepared to prosecute a proxy ⁠fight if eBay's committee was not receptive to the proposal.

Ebay did not instantly respond to Reuters requests for remark connected GameStop's offer.

"Ebay should beryllium worthy - and volition beryllium worthy - a batch much money," Cohen said successful the interview. "I'm reasoning astir turning eBay into thing worthy hundreds of billions of dollars."

Cohen, dubbed the "meme king" by retail traders for his relation successful the 2021 meme-stock frenzy and his outsized power ​among ​individual investors connected societal media, has built a estimation for bold, unconventional bets that tin determination markets.

A imaginable ​deal betwixt GameStop and eBay would upend the accustomed M&A playbook, ‌as it is uncommon for a institution to people 1 astir 4 times its size. Such deals typically trust connected important debt, banal issuance, oregon some - banking connected aboriginal net of the combined institution to warrant the cost.