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EBay Turns Down GameStop's $55.5 Billion Takeover Bid

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EBay Turns Down GameStop's $55.5 Billion Takeover Bid

EBay (EBAY) rejected video game retailer GameStop's (GME) proposal to acquire the e-commerce company in what would have been a $55.5 billion deal.

The takeover proposal is "neither credible nor attractive," eBay Chairman Paul Pressler said in a letter to GameStop Chief Executive Ryan Cohen. That letter was contained in a company press release dated Tuesday.

"The board, with the support of its independent advisors, has thoroughly reviewed your proposal and has determined to reject it," Pressler said.

GameStop did not respond to' request for comment.

In making the decision, eBay considered factors including operational risks of a combined company and uncertainty regarding GameStop's financing proposal, according to the letter.

"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," Pressler added.

GameStop, which holds a 5% stake in eBay, offered to purchase the company for $125 a share last week. The offer was structured as an equal mix of cash and stock.

A potential merger would cut $2 billion from eBay's annual costs within a year, Cohen said in a letter sent to Pressler at the time.

Last month, eBay reported first-quarter adjusted earnings of $1.66 per share on revenue of $3.09 billion, compared with $1.37 and $2.59 billion a year earlier. The company expected second-quarter adjusted EPS between $1.46 and $1.51, with revenue ranging from $2.97 billion to $3.03 billion.

Price: $107.80, Change: $-0.33, Percent Change: -0.31%

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