GameStop Offers $55.5 Billion to Buy eBay

GameStop has offered to buy eBay for $55.5 billion, a move that would give the video game retailer control over a decades-old online marketplace where people buy and sell collectibles, apparel, and other goods.

Under the takeover proposal, GameStop said Sunday it is offering $125 per share for eBay in cash and stock. The video game company, based in Grapevine, Texas, already holds a 5% stake in eBay.

GameStop CEO Ryan Cohen said in a letter to eBay's board chairman that the company has a commitment from TD Securities to contribute $20 billion to help fund the deal.

eBay said Monday it will "carefully review and consider the unsolicited proposal to determine the course of action that it believes is in the best interests of the company and all eBay shareholders."

The Wall Street Journal, which first reported GameStop's offer, said Cohen is prepared to launch a hostile bid if eBay rejects the deal. eBay could be a "legit competitor to Amazon," Cohen said in his comments to the Journal.

"eBay should be worth — and will be worth — a lot more money," he told the paper. "I'm thinking about turning eBay into something worth hundreds of billions of dollars."

GameStop has a market capitalization of nearly $12 billion and is far smaller than eBay, which is valued at around $49 billion.

GameStop shares fell in early trading Monday, dropping 2% to $26. eBay's stock rose 5% to $109.72.