Sports Direct has increased its stake in GAME, triggering a £51.9 million bid to complete an acquisition of the high street videogame retail chain.
Mike Ashley’s sports clothing and equipment chain already owned 29.9 per cent of GAME, and has just increased its stake to 38.49 per cent. That meant that it was obliged make a cash offer for the rest of the business, so it offered 30 pence per share, which equates to a bid of £51.88 million.
The bid has raised fears that it may lead to closures of some of GAME’s high street shops. In a statement, available to download here, Sports Direct said: “Sports Direct intends to work with the GAME management team to develop and review GAME’s existing strategic programme of repositioning and right-sizing GAME’s retail business (including via its store optimisation programme), whilst investing in, and expanding, Belong.
“The review will cover areas including the location, size and lease terms of GAME’s sites, its headquarters and distribution centre, its product and services mix, and other key aspects of GAME’s business and operations. In particular, the review will focus on whether the existing GAME sites should be consolidated with others in the Sports Direct Group, re-purposed or closed, including by looking to consolidate GAME sites into Sports Direct’s and open Belong stations and arenas within Sports Direct, House of Fraser or other Sports Direct Group locations, focussing on the customer experience and experiential retail offering.”
Sports Direct has owned 50 per cent of Belong, the chain of e-sports centres currently situated within GAME stores, since February 2018, and its GAME takeover statement suggests it has more confidence in Belong than the GAME retail business itself. Expanding Belong across Mike Ashley’s high street retail empire will certainly increase awareness of the e-sports brand, but it looks likely to take place against a backdrop of GAME store closures.
For more GAME-related information, visit its website.