economy
Ryan Cohen's Mysterious Bank Letter Backing GameStop's eBay Bid Reveals a Big Issue with Deal
The combined company would need to maintain an investment-grade credit profile, GameStop's mysterious financing letter said.
TL;DR
- GameStop's $56 billion bid for eBay is facing questions about its financeability.
- A key condition in the financing letter from TD Securities requires the combined company to maintain an investment-grade credit profile.
- Moody's Ratings stated the acquisition would be 'credit negative' for eBay due to increased leverage.
- Leverage for the combined company could approach nine times debt to EBITDA, likely falling below investment grade.
- GameStop's CEO Ryan Cohen suggested issuing additional stock to fund the deal.
- eBay has confirmed receipt of the offer and stated its board will review it.