The board of eBay has turned down US video game retailer GameStop’s surprise $55.5bn (£41bn) bid for the online marketplace, calling the proposal “neither credible nor attractive”.

Earlier this month, GameStop made an unsolicited offer for eBay, publishing a letter on its website that outlined a deal split between cash and stock.

The move came despite GameStop, famous for its role in the 2021 meme stock frenzy, being valued at significantly less than its target.

The company’s market capitalisation stood at around $12bn before the bid, compared with eBay’s $46bn valuation.
Since announcing the offer, GameStop shares have dropped more than 12 per cent.

In a letter to GameStop’s chief executive Ryan Cohen released on Tuesday, eBay chair Paul Pressler said the board, together with its advisers, had reviewed the proposal and “determined to reject it.”

Pressler said eBay had factored in uncertainties around GameStop’s financing plans, as well as concerns over its borrowing capacity and the operational risks that could arise from a merged group.

Cohen has previously indicated that the company is prepared to pursue a hostile takeover, potentially taking its offer directly to eBay shareholders if the board remained unwilling to engage.

The US retailer has built a 5 per cent stake in eBay and is proposing to acquire the rest at $125 per share.

It says it would fund the deal with around $9.4bn in cash reserves and up to $20bn in debt financing from TD Securities.

However, even after including GameStop’s own market capitalisation of just over $10bn, analysts note there remains a funding gap of roughly $16bn compared with the total value implied by its unsolicited bid.