An article summarized by Quartz:

eBay rejected an unsolicited $56 billion takeover bid from GameStop on Tuesday, with eBay’s board calling the proposal “neither credible nor attractive.” In a letter to GameStop CEO Ryan Cohen, eBay Chairman Paul Pressler said the board had major concerns about the financing plan, the debt burden the merger would create, risks to eBay’s long-term growth, and GameStop’s governance structure and executive compensation model.

GameStop’s proposal offered eBay shareholders $125 per share, a roughly 20% premium, using a combination of cash and GameStop stock. Cohen argued the merger could generate $2 billion in annual savings and suggested GameStop’s retail locations could help support eBay’s authentication and fulfillment operations. To fund the acquisition, GameStop cited a $20 billion debt commitment from TD Securities and roughly $9.4 billion in cash on hand, though questions remained about how the rest of the financing would be secured.

The bid drew skepticism from investors and analysts due to the enormous debt load required for the transaction. Investor Michael Burry reportedly sold his entire GameStop position after the offer was announced, warning that the leverage needed for the deal approached distressed levels. GameStop had also disclosed that it quietly built an approximately 5% stake in eBay before making the proposal, and Cohen hinted he could appeal directly to eBay shareholders after the board’s rejection.

For the article: https://qz.com/ebay-rejects-gamestop-takeover-bid-051226