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GameStop is reportedly exploring a bid to acquire eBay as part of its effort to grow into a $100 billion company, according to The Wall Street Journal, citing sources familiar with the matter.
GameStop has been building a stake in eBay, the report said on Friday (May 1). eBay is valued at around $46 billion, nearly four times the size of GameStop, according to WSJ.
Sources told WSJ that GameStop could make its bid as soon as this month. If eBay is not receptive to the offer, GameStop CEO Ryan Cohen could take the proposal directly to eBay shareholders, one source added.
WSJ said Cohen has been clear about targeting a major transaction. Earlier this year, he told WSJ he was considering potential deal targets, particularly in the consumer and retail space, as part of a plan to move GameStop beyond video games and collectibles.
In January, GameStop announced that its board approved a performance-based stock option award for Cohen, designed to incentivize the CEO to reach a $100 billion market cap. The company said the award aligns incentives with creating long-term value for GameStop’s stockholders.
Also in January, GameStop said it plans to close 430 stores in the U.S. as part of an ongoing evaluation of its international assets and operations aimed at sustaining profitability. In a regulatory filing, the company said the review involves identifying stores for closure based on multiple factors, including current market conditions and individual store performance.
A separate WSJ report on the proposed deal quoted analysts who said an acquisition would likely require significant levels of debt financing. Bernstein analysts said in a research note that there are “real challenges” to structuring the deal, and that a transaction could pose risks for eBay’s turnaround, which the online marketplace has said is progressing smoothly.
WSJ also noted that eBay faces competition from retail and marketplace players including Amazon and Walmart, as well as Etsy, Craigslist and Temu.
In February, eBay announced an investment in TrueLayer as part of a collaboration with the Pay by Bank provider. The partnership is intended to allow eBay’s U.K. buyers to pay directly from their bank accounts, authorizing transactions via banking apps in seconds.
At the time, Avritti Khandurie Mittal, vice president of product for eBay Services, said in a news release that Pay by Bank is an important step in diversifying eBay’s payment mix with a secure, real-time way for buyers to pay directly from their bank accounts.
PYMNTS said it contacted both companies for comment but had not yet received a reply.
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