Shirebrook-based Sports Direct has put forward an offer for retailer GAME worth £51.88 million.
Sports Direct has been an investor in GAME since July 2017 and has acquired more shares in the gaming retailer from Marlborough UK Micro-Cap Growth Fund. The acquisition sees Sports Direct become a bigger shareholder in the company with almost 39% of the business. Because of this, Sports Direct is required to make a mandatory cash offer for the remaining GAME Shares not held by Sports Direct.
Mike Ashley’s Sports Direct is offering 30 pence in cash for each GAME Share.
In February 2018, Sports Direct and GAME entered into a collaboration agreement covering the rollout of BELONG and GAME retail stores, including the entering into of concession agreements regarding the siting of BELONG arenas and/or GAME retail stores in Sports Direct locations. BELONG is GAME’s competitive gaming and eSports experience centred around physical ‘arenas’, bringing both casual and competitive gaming to communities nationwide, in city and town centres and in major shopping centres. As part of the agreement, the Sports Direct Group acquired a 50% interest in the BELONG intellectual property rights for a cash consideration of £3.2 million, and a 50% profit share of future profits of BELONG. Sports Direct has also provided GAME with a £35 million capital expenditure facility, which GAME may utilise to fund the venues envisaged under the collaboration agreement, including the costs for new venues and ongoing development of the BELONG website and its related tournament management system.
In a statement to the London Stock Exchange Sports Direct said: “The retail and gaming sectors are fast moving and currently subject to challenging conditions. Sports Direct does not believe that, as a standalone business, GAME is able to weather the pressures that it is facing. Sports Direct believes that the Offer, in providing GAME with the wider benefit of Sports Direct’s operating and other experience and increased support, will secure GAME’s future and allow it to navigate these pressures whilst contributing to GAME’s long-term sustainability by escalating the evolution of the BELONG business and accelerating the next stage of GAME’s development.”