GameStop launches a takeover bid for eBay for €47.335 billion
The video game store chain considers that the resulting company could become "a serious competitor to Amazon"
BarcelonaThe video game store chain GameStop has launched a takeover bid for 100% of the e-commerce portal eBay. The technology giant, now recovered after the crisis it plunged into in 2021 due to a shareholder war on the Reddit portal, values the historic buying and selling platform at $55.5 billion, about €47.335 billion at the current exchange rate. The offer will be made in a combination of cash and shares, as announced on Sunday by the CEO of the company launching the bid, Ryan Cohen, in statements to the Wall Street Journal. His latest moves in the shareholder base already hinted at some interest: in recent months, GameStop has built a position of close to 5% in eBay through share purchases and various financial instruments.
The market has reacted with surprise to the operation: the video game seller, one of the most established brands in its sector, has a capitalization almost four times lower than the platform it intends to acquire. At the close of last Friday, the total valuation of GameStop was $12 billion, while that of eBay stood above $46 billion. Nevertheless, the offer submitted to the platform's board of directors offers a premium of close to 20% compared to Friday's quotation. eBay's management has not requested the offer, and Cohen has already stated that, if the leadership "does not receive it well", he is willing to take it directly to the shareholders and turn it into a hostile takeover bid.
In the executive's opinion, the synergies in the form of cost reductions and additional revenue that the merger would generate could turn the resulting company into "a serious competitor to Amazon". According to initial calculations, the combination could reduce operational expenses by about $2 billion, and increase the portal's earnings per share to $7.29, about three dollars per unit more than the current ones.
The offer would indicate poor management of eBay's potential value, according to GameStop's CEO. In statements to the
WSJ
, Cohen has argued that the portal "should be worth much more, and it will be worth much more". According to his calculations, the platform's activity integrated with the video game store chain could boost its valuation to "hundreds of billions of dollars", thanks to the lower cost of joint activity and the use of physical points of sale to distribute products purchased on the digital marketplace.
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