eBay Inc. today announced that, following a thorough review with the support of its financial and legal advisors, the company’s Board of Directors has determined to reject GameStop’s unsolicited, non-binding acquisition proposal.
In a letter to GameStop CEO Ryan Cohen, eBay Chairman of the Board, Paul S. Pressler, wrote:
“We have concluded that your proposal is neither credible nor attractive. We have taken into account such factors as 1) eBay’s standalone prospects, 2) the uncertainty regarding your financing proposal, 3) the impact of your proposal on eBay’s long-term growth and profitability, 4) the leverage, operational risks, and leadership structure of a combined entity, 5) the resulting implications of these factors on valuation, and 6) GameStop’s governance and executive incentives.
eBay is a strong, resilient business that has delivered meaningful results over the past several years. We have sharpened our strategic focus, strengthened execution, enhanced our marketplace and seller experience, and consistently returned capital to shareholders. With its differentiated global marketplace and a clear strategy, eBay’s Board is confident that the company, under its current management team, is well-positioned to continue to drive sustainable growth, execute with discipline, and deliver long-term value for our shareholders.
Our team remains focused on executing our strategy and driving our business forward in the best interests of the company, our shareholders, our employees, and millions of buyers and sellers around the world.”
The rejection could result in a hostile bid, as GameStop CEO Ryan Cohen mentioned he was willing to bring the offer directly to eBay shareholders, possibly through calling a special meeting.
EBay stock fell 1%, while GameStop was down 4% following the announcement.
By CEO NA Editorial Staff
