Game has been inching towards a buy-out from Sports Direct for a while, but like a barely-hungry python eating a wounded deer who sells Fortnite t-shirts and tells you that thing you want is out of stock, it’s taken Sports Direct some time to fully digest the retail chain.
Last Friday, however, Game’s board of directors begrudgingly recommended that shareholders go ahead and accept Sports Direct’s £51.9m takeover at 30p per share.
The situation is bad enough at Game that this seemed to be a decent enough offer. The high street is pretty quiet, with more people than ever buying titles and consoles online, and new streaming and cloud gaming businesses evolving at a rate of knots. Game also wants to expand its Belong esports endeavour, which currently isn’t growing nearly fast enough. With Sports Direct’s increased involvement in Belong’s gaming arenas strategy, Game would have a better chance at making a success of it in the future.
“Game launched the first arenas back in 2017, but it has only grown to just over 20, despite the planned tie-up with Sports Direct that was set to open its Belong arenas in up to 100 new locations,” said analyst Zoe Mills at Global Data.
“Now that Sports Direct controls House of Fraser, there is a clear option to utilise some of the increasingly redundant space in some of those stores, helping to generate higher footfall and increase its investment in experiential retail.”
You can read the official press release from Game below…
“The Board has been considering the merits of the Mandatory Offer and consulting with its major shareholders and advisers, whilst also actively engaging in normal course discussions with Sports Direct and its advisers during this time. 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 (“Canaccord Genuity”), 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. In providing its advice, Canaccord Genuity has taken into account the commercial assessments of the directors of Game.
“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.”
