Gamestop is offering US$125 per share in a combination of stock and cash, a 46 percent premium over the average stock price since it began acquiring shares in eBay on February 4, it said in a release on Sunday.
“EBay should be worth – and will be worth – a lot more money,” GameStop chief executive Ryan Cohen said in an interview with the Wall Street Journal published on Sunday.
“I’m thinking about turning eBay into something worth hundreds of billions of dollars,” he said. “It could be a legit competitor to Amazon.”
GameStop confirmed it had received a letter of commitment from TD Bank, an American subsidiary of the Canadian TD Bank Group, for approximately US$20 billion in financing through a debt issuance.
In the press release, the company also said it had about US$9.4 billion in cash reserves as of January 31.
It stated it could generate US$2 billion in annualised cost reductions within 12 months of the transaction’s completion.
These cost reductions alone would boost eBay’s comparable-store earnings per share from US$4.26 to US$7.79 in the first year, it said.
But if eBay’s management is not receptive to his offer, Cohen told the Journal he would not hesitate to approach shareholders.
EBay’s next annual general meeting is scheduled for June, but the deadline for submitting resolutions has passed, the WSJ pointed out.
At Friday’s close, GameStop’s market capitalisation reached US$11.89 billion, while eBay’s stood at US$46.21 billion. (AFP)
