Online marketplace giant eBay has rejected a $55.5bn (£40.9bn) takeover bid from video game retailer GameStop, calling it “unsolicited” and “neither credible nor attractive”.
In a letter to GameStop chief executive Ryan Cohen, eBay’s board of directors rejected the surprise bid and said the marketplace was a “strong, resilient business”.
The board cited as a reason for rejecting the bid “the impact of your proposal on eBay’s long-term growth and profitability”, adding it also considered the offer’s “operational risks, and leadership structure of a combined entity”.
The marketplace also raised concerns over “GameStop’s governance” in the list of factors it had weighed up before rejecting last week’s surprise bid.
Despite the board’s rejection of the offer, Cohen said he will take the proposal directly to eBay shareholders.
GameStop launched the bid on May 5, providing little detail behind its rationale for the acquisition. The business is perhaps best known in the UK for having been a ‘meme stock’ in 2021 when a campaign by amateur investors caused a squeeze on financial institutions that were shorting the retailer’s shares and they rocketed in value.
Analysts in the US had expected the offer to be rejected by eBay on the basis that GameStop is a much smaller company and due to the uncertainty over how such deal could be financed.
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