GameStop has proposed to acquire eBay Inc. in a $56 billion cash-and-stock deal, with CEO Ryan Cohen saying he is ready to present the bid directly to shareholders if eBay’s board remains unreceptive.
The offer, evenly divided between cash and GameStop common stock, reflects a 20% premium over eBay’s Friday close of $104.07 and a 46% premium over its closing price on Feb. 4, when the gaming retail giant began accumulating a stake in the company, according to GameStop’s statement.
As stated in the letter Cohen sent to eBay, “Following close, I will serve as Chief Executive Officer of the combined company. I will receive no salary, no cash bonuses, and no golden parachute – I will be compensated solely based on the performance of the combined company.”
Cohen told reporters that combining eBay and GameStop could create significant opportunities to boost earnings and reduce costs. “It could be a legit competitor to Amazon,” he said.
“For obvious reasons, eBay is a public company, there’s all kinds of perverse financial incentives from the board to the management team. So there’s only one way to approach something like this.”
“We are offering half cash, half stock, and we have the ability to issue stock in order to get the deal done,” Cohen said.
GameStop has amassed about a 5% stake in eBay, “It makes us one of the largest shareholders. So they have a fiduciary duty to their shareholders to evaluate this proposal. This is a business that is under-earning and can make a lot more money. And GameStop is a good blueprint for that.”
By CEO NA Editorial Staff
