"The Board, with the support of its independent advisors, has thoroughly reviewed your proposal and has determined to reject it. The Board has concluded that the proposal is neither credible nor attractive. In reaching this conclusion, the Board considered, among other things, uncertainty regarding the financing of the acquisition and the leverage and operational risks associated with combining the two businesses."
"Cohen's offer, unveiled on 4 May, was a cash-and-stock proposal at $125 per eBay share, a 20% premium to the previous close. The cash half was to be funded by a $20bn commitment letter from TD Securities. The letter, which Cohen made public, came with a condition that the combined company would need to retain an investment-grade credit rating after the deal closed."
"Moody's promptly described the proposed acquisition as "credit negative" for eBay because of the leverage implied. Without an investment-grade rating, the TD facility would not draw. There was also a separate, unconventional funding component. On 7 May, Cohen announced on X that he intended to sell items from his GameStop office, including store signs and old carpet, on eBay's own marketplace to help fund the bid."
"The board cited uncertainty around GameStop's acquisition financing and the leverage and operational risks of combining the two businesses. eBay has formally rejected GameStop's $56bn takeover bid, telling the video-game retailer's CEO Ryan Cohen on Tuesday that his proposal is "neither credible nor attractive." Paul Pressler, the chairman of eBay's board, set out the rejection in a letter that was unusually direct by the standards of US M&A correspondence."
eBay formally rejected GameStop’s $56bn takeover proposal from CEO Ryan Cohen. eBay told Cohen the offer was neither credible nor attractive and said the board, supported by independent advisors, thoroughly reviewed the proposal and determined to reject it. The board cited uncertainty around acquisition financing and the leverage and operational risks of combining the two businesses. Cohen’s $125-per-share offer, announced on 4 May, included cash and stock and offered a 20% premium. The cash portion depended on a $20bn TD Securities commitment letter with a condition that the combined company retain an investment-grade credit rating after closing. Moody’s described the acquisition as credit negative, and the TD facility would not draw without the rating. Cohen also proposed selling items from his GameStop office on eBay to help fund the bid.
Read at TNW | Business
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