The Ryan Cohen saga gets a new twist as eBay shoots down GameStop's takeover offer

By Emily Bary

EBay says the $56 billion buyout deal is 'neither credible nor attractive' as it backs its standalone prospects

eBay's board of directors wants the company to remain standalone.

The board of directors at eBay on Tuesday rejected GameStop CEO Ryan Cohen's buyout offer, calling it "neither credible nor attractive."

Cohen had proposed that GameStop buy eBay, a much larger company, for $56 billion through an even mix of cash and stock. GameStop's ability to finance the deal, however, has been a subject of debate on Wall Street.

See more: GameStop launches a $56 billion bid for eBay - but the math isn't working out

EBay cited the financing roadmap as well in a list of reasons for turning down the deal offer, calling out "uncertainty regarding your financing proposal." It also mentioned other factors like the leverage that the combined entity would have and "GameStop's governance and executive incentives."

"With its differentiated global marketplace and a clear strategy, eBay's board is confident that the company, under its current management team, is well-positioned to continue to drive sustainable growth, execute with discipline, and deliver long-term value for our shareholders," eBay added in its release.

A representative for GameStop didn't immediately return a MarketWatch request for comment.

Shares of GameStop (GME) are off 4.6% in premarket action Tuesday, while shares of eBay (EBAY) are down 2.1%. GameStop finished Monday's trading session with a roughly $10 billion market capitalization; eBay's was $48 billion.

EBay has been in the midst of reinventing its online-marketplace business, including through a deep push into the collectibles market. GameStop has also been looking for ways to reignite its customer base as online gaming has dampened the relevance of the company's bricks-and-mortar stores. Cohen, the GameStop CEO, has noted opportunities to cut costs at eBay.

The takeover saga has gotten heated, with Cohen attempting to sell some items on eBay, including a pair of used socks listed for a hefty sum. He was banned from the platform last week.

Read: EBay permanently bans GameStop CEO Ryan Cohen for putting its community 'at risk' following takeover attempt

-Emily Bary

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