Game Recommends Shareholders Accept £51.88 Million Buy-Out by Sports Direct

By CJ Wheeler on at

Retail chain Game took a step closer toward being purchased by partner company Sports Direct on Friday following a recommendation made by Game's board that shareholders accept an offer totalling £51.88 million.

Gameindustry.biz reports that a mandatory buy-out offer triggered by Sports Direct increasing its stake in the company by 10 per cent earlier this month has been given a grudging thumbs-up at Game Digital headquarters. Shareholders were offered 30 pence per share when the share value was 23.55 pence, although the price currently stands at 29.80.

Game issued a statement on Friday announcing its decision:

"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."

Game particularly emphasised the value it sees in its BELONG esports and social gaming operations, which launched in 2017, and acknowledged Sports Direct's intention to support and "accelerate the evolution" of that side of its business. Sports Direct paid £3.2 million in February last year for a 50 per cent stake in BELONG. The first BELONG Arena inside a Sports Direct store was opened at Lakeside in Thurrock, Essex back in October.

Among other factors for accepting Sports Direct's offer, the Game board noted the challenging retail environment and the probability of an extended hardware lifecycle for the present console generation. It appears that any future form Game takes in the UK and beyond is now in the hands of its shareholders.