GAME Advises Shareholders to Accept Sports Direct Deal
Mike Sanders / 12 months ago
GAME Sale on the Horizon?
Earlier this month it was reported that struggling UK retailer ‘GAME’ had received a mandatory offer for purchase by Sports Direct. This was made after the company had secured enough shares of the company to require an official offer to be made.
Since then, the news has been rather quiet. Most indications, however, suggested that the purchase was more than likely set to proceed. This was based, in no small part, due to the retailer not only being officially ‘for sale’ for nearly a year now but also on a far more critical point. GAME simply isn’t making money. At least, not like it used to.
In a surprise move, however, a report via GamesIndustry indicates that GAME themselves has issued a formal recommendation for their shareholders. Namely, advising them to accept the offer.
What Does This Mean?
Well, in its simplest terms, it means that the sale is almost guaranteed to happen at this point. This isn’t a hostile takeover as if often seen in business. GAME is basically begging their shareholders to allow Sports Direct to buy them!
“Whilst the Board is disappointed that Sports Direct decided to issue its offer document unilaterally whilst these discussions were ongoing, the Board has unanimously concluded, following a period of detailed deliberation and having been so advised by Canaccord Genuity Limited, that 30 pence per share represents a fair value for the Group and intends, therefore, to recommend that shareholders accept the Mandatory Offer, as those members of the Board who hold GAME shares intend to do.
With such a statement being made, we’d say to expect GAME to be sold in the very near future.
If the deal goes ahead, then there’s a number of very quick moves we can expect. Firstly, I’d anticipate that many of the poorly performing stores would be immediately closed. In addition, there have also been rumours of a ‘store combination’. In other words, Sports Direct stores would have an ‘in-house’ GAME on location.
One thing is, however, certain. While not exactly time to panic, staff should be concerned about job cuts being on the horizon. Worse, with Sports Direct owner Mike Ashley not exactly having the best relationship with his current staff, it may not be much better for those who do manage to keep their jobs!
What do you think? Is this a good or bad move for the company? Would it affect you using them? – Let us know in the comments!