GameStop's $56 Billion Bid to Acquire eBay: A Detailed Commercial Law Breakdown

A $12 billion company just made a $56 billion bid to buy eBay. Unsolicited. No prior discussions. Just Ryan Cohen doing Ryan Cohen things.

Most people still see GameStop as a meme stock. Cohen has been quietly repositioning it as a diversified holding company with $9 billion in cash, and this is his biggest swing yet.

So how does a $12bn company buy a $56bn one?

Through a leveraged buyout or LBO. Instead of paying the full price upfront, you borrow heavily against the target company’s own assets and future cash flows to fund the deal. GameStop has secured $20 billion in debt financing from TD Securities to make it work, in addition to its own cash.

If it goes ahead, Morgan Stanley says this would be the largest LBO in history.

White & Case LLP, one of the world's largest M&A firms, is advising GameStop, led by New York M&A partner Richard Brand.

Cohen’s vision? Combine GameStop’s 1,600 physical stores with eBay’s online marketplace to build something Amazon can’t easily replicate: a physical and digital network built around collectables, resale and enthusiast buyers.

Follow for more commercial law breakdowns aimed at future lawyers.

#commerciallaw #M&A #GameStop #eBay #leveragedbuyout