GameStop has made a US$55.5 billion (about C$75.5 billion) offer to acquire eBay.
Under the proposal, eBay would merge with GameStop, with Ryan Cohen, the Montreal-born head of the video game retailer, becoming CEO of the combined company. In a letter to eBay’s chairman of the board, Cohen said the cash-and-stock deal includes a $20 billion commitment from TD Securities. eBay, for its part, has confirmed receipt of GameStop’s “unsolicited non-binding acquisition proposal” and says its board of directors will review the offer.
Speaking to The Wall Street Journal, Cohen said he believes the merger could cut costs and improve earnings while providing “a legit competitor” to Amazon in the e-commerce space. Cohen, who took a sizeable stake in GameStop in 2020 before becoming CEO three years later, has focused on expanding the company’s online business and investing more heavily into collectibles and other pop-culture merchandise. All the while, he’s closed many stores and reduced the company’s international footprint, which included selling its Canadian division to French-Canadian entrepreneur Stephan Tetrault, the co-owner of McFarlane Toys. (GameStop Canada has since rebranded to EB Games Canada.)
However, some analysts told The Wall Street Journal that they’re skeptical that Cohen could pull off the acquisition. Cohen was also tight-lipped during an interview with CNBC about where the rest of the money would come from. On top of all that, it should be noted that prior to this news, eBay was valued at around US$46 billion, while GameStop was valued at $12 billion.
Cohen himself is also a polarizing figure. He originally offered to sell the GameStop’s Canadian and French businesses because of “wokeness and DEI.” He’s also baselessly promoted the conspiracy theory that Donald Trump won the U.S. presidential election in 2020 and complained about the tariffs that Trump himself imposed and were later deemed illegal.
For now, we’ll have to wait to see what eBay’s board decides. If that doesn’t pan out, Cohen told The Wall Street Journal that he will take the offer directly to shareholders.
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Source: GameStop, The Wall Street Journal
