GameStop's chief executive Ryan Cohen has renewed his warning that he could pursue a hostile takeover of eBay after the online marketplace declined to engage on his unsolicited $125-per-share offer, according to reports.
In a letter sent to eBay's board chair Paul Pressler, Cohen faulted the board for dismissing the bid without substantive discussion. He said he would bypass the board if necessary and present the proposal directly to eBay's shareholders.
GameStop has accumulated a roughly 5% ownership stake in eBay, positioning the company to support a more aggressive campaign if it moves forward. Earlier this month GameStop, which has a market value of $10.3 billion, disclosed a cash-and-stock approach for eBay, an entity valued at more than four times GameStop's size.
eBay's board declined Cohen's request for a meeting and on Tuesday publicly rejected the proposal, which was structured as half cash and half stock. The company described the offer as "neither credible nor attractive," citing concerns about how the deal would be financed, the anticipated debt profile of a combined business, and questions relating to governance and executive compensation.
In his communication with eBay leadership, Cohen also raised concerns about the marketplace's governance practices and pay arrangements at the top. He highlighted that CEO Jamie Iannone earned $144 million over his six-year tenure while eBay's active buyer count declined, using those points to question management priorities and incentives.
The public exchange leaves the situation unresolved. With eBay's board unwilling to meet and the company having formally dismissed the terms of the proposal, Cohen has signaled he will take his case directly to the shareholder base, backed by the 5% stake GameStop holds.
Context and implications
The disagreement centers on a proposed transaction that would combine two companies of markedly different market capitalizations and governance histories. eBay's rejection highlighted financing and debt worries for a merged entity and flagged corporate governance and executive pay as points of contention. Cohen's decision to accumulate equity and threaten a direct-to-shareholder presentation escalates the situation beyond a simple unsolicited offer.