eBay shuts down GameStop’s $56B takeover offer

eBay (NASDAQ: EBAY) on Tuesday told GameStop (NYSE: GME) to take its roughly $56 billion takeover offer and leave it at the door, calling it “neither credible nor attractive.”

Speaking in a press release, eBay’s board said, “This decision was made after a thorough review with the support of our financial and legal advisors.”

Cryptopolitan had previously reported that GameStop’s CEO Ryan Cohen wanted to buy all of eBay through a half-cash, half-stock deal, taking a 5% stake in eBay.

eBay says Ryan failed to bring a firm deal that protects shareholders

The eBay board gave several reasons for turning Ryan down, starting with its business outlook, questions around GameStop’s financing, the risk to eBay’s future growth and profits, the amount of debt the combined company would carry, and the challenge of merging two very different businesses.

“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 deliver long-term value for our shareholders,” said eBay.

Moody’s Ratings had already said about a week a GameStop-eBay acquisition would be a terrible idea, because it would bring on a heavy debt load. Though the agency kept eBay’s Baa1 stable rating and outlook in place.

Moody’s observed that the adjusted debt of eBay stood at about $7.2 billion as of the end of 2025. The last-twelve-month adjusted EBITDA of the company was approximately $3.1 billion, and the gross leverage was close to 2.3x. Taking into consideration about $20 billion of additional deal debt and the existing $4.2 billion debt of GameStop as of the end of 2025, the total debt stands at approximately $31.4 billion.

This represents more than a 400% increase in the debt structure of eBay on a stand-alone basis without considering any cost synergy. Considering the pro forma combined performance using eBay’s $3.1 billion EBITDA and GameStop’s $345 million EBITDA, the gross leverage may be close to 9x at closing.

The extra interest bill also looked heavy. Moody’s estimated yearly interest cost from the new debt could top $1 billion, assuming the new borrowing cost is above eBay’s current weighted average rate of about 5% to 6%. eBay had close to $900 million of free cash flow after dividends in 2025. GameStop had about $600 million at its fiscal year-end. Moody’s said the combined company’s free cash flow would be tight if real cash had to be spent to get planned savings.

GameStop said it could find about $2 billion in yearly synergies within 12 months of closing. It said 60% would come from sales and marketing, 25% from general and administrative costs, and 15% from product development. Moody’s said that would equal about 3.25x of deleveraging potential if all of it happened with no offsetting costs or losses.

The difference between the two businesses was quite apparent. eBay posted revenue of around $11.1 billion and an EBITDA of $3.1 billion, with an EBITDA margin of 28.2%.

GameStop earned revenues of about $3.6 billion and an adjusted EBITDA of about $345 million, with EBITDA margins of around 10%. GameStop had pointed out the presence of about 1,600 U.S. retail stores that can be utilized for authentication, intake, fulfillment, and live commerce purposes.

Moody’s revised one item in the bond structure of eBay. According to it, while the bond indentures of eBay seem to be providing change-of-control provisions, there seems to be no such provision for $750 million of 3.65% notes due in 2042.

In case, the takeover qualified as a change of control, and in case of an event where eBay is downgraded by both rating agencies beyond investment grade during a defined period, then the bondholders have the option to redeem the notes at 101%. This would mean that GameStop would need additional funds to repay the bond debt.

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