White & Case is counselling GameStop in its surprise $55.5bn offer to buy e-commerce giant eBay.
White & Case’s team is being led by New York M&A partner Richard Brand, according to an SEC filing. He previously advised the video game retailer on its distribution of up to $1.9bn in warrants to purchase GameStop common stock to its shareholders and convertible noteholders.
GameStop, which rose to prominence during the Covid-19 pandemic when it became the centre of a meme stock craze, is offering to pay $125 a share in a 50-50 mix of cash and stock – a premium of about 20% based on eBay’s Friday close, according to Reuters.
GameStop CEO Ryan Cohen told the Wall Street Journal he was prepared to take his bid directly to shareholders if eBay’s board rejected it.
In a letter to eBay’s chairman, Paul Pressler, Cohen said it had a commitment letter from TD Securities to provide up to $20bn in debt to help finance the deal.
He also wrote that GameStop would cut $2bn of eBay’s annualised costs within 12 months of the deal’s close, leading to an increase in the company’s earnings per share.
eBay is nearly four times the size of GameStop, with a market capitalisation of around $47bn, but has seen its user base shrink in the face of competition from Amazon. It has lost nearly 40 million users over the past eight years, according to the BBC, going from 175 to 136 million.
Cohen told the Wall Street Journal that eBay could be a “legit competitor” to Amazon, adding its “should be worth – and will be worth – a lot more money”.
Under the proposed deal, Cohen would become the chief executive of the new business and receive no salary or bonuses, being “compensated solely based on the performance of the combined company”.
ebay did not immediately respond to GLP’s requests for comment regarding its legal advisors on the matter.
The company has turned to Wachtell Lipton Rosen & Latz for counsel on significant corporate deals in the past, including its sale of ticketing unit StubHub to ticket reseller Viagogo for $4bn in 2019 and the €14bn sale of online classifieds group Adevinta to a private equity consortium, one of Europe’s biggest buyouts in 2023.
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