GameStop CEO Ryan Cohen has issued a forceful response to eBay's rejection of his $56 billion acquisition proposal, reiterating his threat to pursue a hostile takeover.
According to disclosed correspondence, Cohen wrote to eBay Chairman Paul Pressler on Wednesday, accusing the company of hastily dismissing the unsolicited $125 per share offer without engaging in any substantive communication regarding its terms.
Cohen stated that despite being denied a meeting with eBay's board, he intends to present the acquisition proposal directly to shareholders.
In his letter, Cohen wrote: "The eBay board should not dismiss a $125 per share proposal without evaluating its substantive value. The financial rationale for the transaction is clear, and information is transparent. eBay shareholders have the right to assess it."
To advance the acquisition, GameStop has increased its stake in eBay by 5%, laying the groundwork for a potential hostile takeover.
Earlier this month, GameStop, with a market capitalization of just $10.3 billion, announced its intention to acquire eBay—a company over four times its size—through a cash and stock deal.
On Tuesday, eBay rejected the half-cash, half-stock offer, deeming it neither credible nor attractive. eBay expressed concerns about the feasibility of financing the transaction, the post-merger debt levels, GameStop's corporate governance, and its executive compensation incentives.
In his communication to eBay, Cohen countered by criticizing eBay's own governance and executive pay structure. He highlighted that CEO Jamie Iannone received $144 million in compensation over his six-year tenure while the platform experienced a continuous decline in active buyers.
Cohen also pointed out that Iannone has not purchased any eBay shares on the open market during his tenure.
Cohen attributed his ability to turn around GameStop's losses to his significant personal financial stake in the company's success. He wrote: "eBay directors hold no company shares yet have overseen a net loss of users for five consecutive years."
This strong rebuttal marks the latest development in one of the most unusual acquisition dramas in recent years. While initially cheered by GameStop's retail investors, the company's stock has fallen 17% since news of the acquisition attempt surfaced.
eBay shares closed up 2.4% on Wednesday at $113, giving the company a market capitalization of approximately $500 billion.
eBay has not yet responded to requests for comment.