GAME agrees £52m takeover by Mike Ashley's Sports Direct
It doesn't sound like it had much choice.
GAME has agreed to a £51.9m takeover by Mike Ashley's Sports Direct.
The retailer's board of directors accepted the 30 pence per share offer, which it said in a note "represents a fair value for the Group".
It sounds like GAME didn't have much choice but to accept the offer from Sports Direct, whose shareholding in the group was already growing. GAME was also relying on Sports Direct for supporting its plans for growth, which involve the future rollout of Belong and GAME venues.
Plus, well, it's not exactly boom time on the high-street, or, as GAME's note called it, "the ongoing industry headwinds, current negative retail market outlook and the likely elongated current console lifecycle which are expected to impact the future financial performance of the Group."
With GAME's bricks and mortar video game sales business struggling, it has tried to reposition itself with its Belong gaming arenas business. These arenas are home to various esports events, such as for FIFA, Mortal Kombat, Overwatch and League of Legends. You can book them for parties, too.
GAME said it sees "significant opportunity" with Belong, and accepting Sports Direct's offer will see increased financial and operating support.
In 2018, Sports Direct rescued department store chain House of Fraser from administration. Could we now see Belong arenas pop up in-store?
"The Board wishes to recognise the efforts of the GAME management team in driving the broader transformation strategy, the launch of Belong and delivering significant efficiencies and right sizing throughout the business to position better the Company to navigate the challenging and evolving markets in which it operates," reads the company's press release.
GAME's board of directors have now recommended shareholders accept Sports Direct's mandatory offer.