Major eBay investor turns down GameStop’s $55.5 billion takeover proposal: Reports

A major investor in eBay has reportedly rejected GameStop’s proposed $55.5 billion takeover bid, casting fresh doubt over one of the year’s most unexpected acquisition attempts in the retail and e-commerce sector.

As per reports, GameStop recently proposed acquiring eBay in a deal valued at approximately $125 per share, structured through a combination of 50% cash and 50% stock. The offer places a valuation on eBay significantly above its recent trading price and far exceeds GameStop’s current market capitalisation.

Smead Capital Management, which reportedly holds nearly 1.5 million shares in eBay, has publicly opposed the proposed takeover.

Bill Smead, chief investment officer of the firm, said he did not believe eBay should agree to a sale, arguing that the company remained strong as an independent business.

Smead reportedly described eBay as the “New York Stock Exchange of preowned items” and suggested the company did not require a merger to continue growing.

The resistance from a major shareholder is expected to complicate efforts by GameStop chief executive Ryan Cohen to secure broader investor backing if the proposal progresses further.

Analysts have also questioned the feasibility of the transaction, particularly its financing structure.

As per reports, the proposal partly depends on debt financing, including a “highly confident” financing letter from TD Securities worth around $20 billion.

However, analysts reportedly noted that the funding does not yet represent fully committed capital, raising concerns that financing could become more difficult if market conditions deteriorate.

Industry experts have additionally raised doubts about the strategic fit between the two companies.

While GameStop’s business is centred on gaming retail and collectibles, eBay operates as a global online marketplace with a substantially broader customer base and a different operating structure.

Some analysts suggested that potential synergies between the companies may be limited beyond possible cost-cutting measures.

eBay earlier confirmed that it had received the unsolicited proposal and would evaluate it carefully.

Following news of the bid, eBay shares rose in trading, while GameStop shares fell as investors reacted cautiously to the proposed takeover.