Video game retailer GameStop has made a private $55.5 billion takeover offer for e-commerce company eBay, the BBC and other foreign media reported on May 4.

GameStop said it would buy eBay shares for $125 each, the reports said. That is $20 above Friday’s New York closing price. The purchase price would be paid in a mix of cash and stock. The BBC reported that GameStop received a commitment letter for about $20 billion in debt financing from TD Securities to fund the deal.

GameStop CEO Ryan Cohen (라이언 코언) said he would make a direct acquisition proposal to shareholders if eBay’s board rejects the offer.

In a letter sent to eBay, he also stressed that he would cut costs by $2 billion within 1 year after the deal closes.

Most of the cost cuts would focus on eBay’s sales and marketing division. GameStop said higher spending in that area did not lead to an increase in eBay users, even though the brand is effectively known to anyone.

Commenting on GameStop’s move, Forrester retail industry analyst Sucharita Kodali (수차리타 코달리) said the proposal was "not a very good proposal". She cited a structure in which eBay would take on GameStop’s debt. She added that for GameStop, linking up with a large company like eBay could lift its corporate value.

GameStop’s current market capitalisation is about $11.9 billion. GameStop has reduced its number of stores in recent years, but it still operates about 1,600 stores in the United States. Cohen said those stores could serve as a nationwide network for eBay’s live commerce business.