NEW YORK CITY, New York: eBay on May 12 rejected a US$56 billion takeover proposal from GameStop, saying the offer was "neither credible nor attractive" and raising concerns about financing and leadership.

The bid, unveiled last week by GameStop CEO Ryan Cohen, proposed a half-cash, half-stock transaction valued at $125 per eBay share.

"We have concluded that your proposal is neither credible nor attractive," eBay Chairman Paul Pressler said in a statement. "eBay's Board is confident the company, under its current management team, is well-positioned to continue to drive sustainable growth."

Pressler said eBay's board had concerns about the proposed financing, the impact on eBay's long-term growth, and the leadership structure of the combined company.

GameStop did not immediately respond to a request for comment.

The proposed deal surprised Wall Street because GameStop, valued at about $12 billion, is significantly smaller than eBay, whose market value is roughly four times GameStop's.

Cohen said he had secured a $20 billion debt financing commitment from TD Bank, contingent on the combined company receiving an investment-grade credit rating.

However, Moody's said last week that the acquisition would be credit-negative for eBay, and sources familiar with the matter said eBay believes it is highly unlikely that the merged company would qualify for investment-grade status.

Cohen has argued that combining the two companies would create operational synergies and allow eBay to use GameStop's 600 U.S. stores to compete more effectively with Amazon.

He also told eBay's board that he would serve as chief executive of the merged company and would take no salary, cash bonuses, or severance payments.

Analysts were skeptical from the outset. eBay shares traded well below the offer price after the bid was announced, signaling investor doubts that the transaction would proceed.

The offer has also divided GameStop investors. Investor Michael Burry reportedly sold his stake after the bid, warning that the deal could increase debt and dilute shareholder value.