GameStop Bids $55.5B for eBay Acquisition

GameStop CEO Ryan Cohen announced an unsolicited bid Sunday to acquire eBay for $55.5 billion in a cash-and-stock deal valued at $125 per share, a 20 percent premium to eBay's Friday closing price. The proposal, detailed in a letter to eBay's board, envisions merging the two companies to create a larger e-commerce player focused on collectibles and resale markets, potentially challenging Amazon.

GameStop, with a market capitalization of about $11.9 billion and $9.4 billion in cash equivalents, plans to fund half the deal in cash and half in stock. The offer includes a highly confident financing letter from TD Securities for up to $20 billion, along with GameStop's recently disclosed 5 percent stake in eBay. Cohen promised $2 billion in annual cost savings within a year through reductions in sales, marketing, product development, and administrative expenses. He also highlighted synergies from GameStop's 1,600 U.S. stores, which could enhance eBay's logistics, authentication, and fulfillment for items like Pokémon cards, a growing category for both firms.

The bid drew immediate scrutiny during Cohen's Monday appearance on CNBC's Squawk Box. Host Andrew Ross Sorkin questioned the...