"The eBay board of directors ultimately decided that GameStop's proposal was neither "credible nor attractive," citing that the company in its current setup is more than capable of delivering "long-term value" for its shareholders. Essentially, eBay is doing just fine business-wise and doesn't need to entertain a buyout offer from GameStop."
""We have taken into account such factors as 1) eBay's standalone prospects, 2) the uncertainty regarding your financing proposal, 3) the impact of your proposal on eBay's long-term growth and profitability, 4) the leverage, operational risks, and leadership structure of a combined entity, 5) the resulting implications of these factors on valuation, and 6) GameStop's governance and executive incentives," eBay chairman Paul Pressler wrote in response to GameStop CEO Ryan Cohen's offer."
"GameStop had previously claimed that it had already secured $20 billion in debt financing--which would become a debt that eBay would have to pay if the deal went through--and its CEO has remained silent on where the rest of the billions would come from to finance the deal. Cohen would benefit enormously from an eBay takeover, as he could earn up to $35 billion in stock options if GameStop's market value cap increased to $100 billion."
"The billionaire still has the option of appealing directly to eBay's shareholders, and purchasing their shares could open the doors for a hostile takeover of the commerce platform. GameStop itself is in a precarious position as hundreds of stores have been closed as part of the company's efforts to become more profitable."
GameStop’s proposal to purchase eBay for $56 billion was rejected by eBay’s board. The board cited concerns about how GameStop would fund the deal, noting GameStop’s limited assets relative to the purchase price. eBay stated that its standalone prospects support long-term value for shareholders, reducing the need to consider a buyout. The board also cited uncertainty in financing, potential impacts on long-term growth and profitability, leverage and operational risks, and issues related to governance and executive incentives in a combined company. GameStop previously claimed $20 billion in debt financing but did not clarify where additional funding would come from. GameStop’s CEO could benefit substantially from stock options tied to a higher market valuation, and shareholders could still be approached for a possible hostile takeover.
Read at GameSpot
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