O game retailer Game is to make a £400m return to the London stock market within the next month two years after it was suspended from trading and collapsed into administration.
The chain is 99 per cent owned by US activist hedge fund Elliott Advisors and one per cent owned by Henry Jackson’s Opcapita, who fronted the buy-out of Game in March 2012.
It plans to raise £12m from the sale of new shares. The float will also trigger a windfall payout for Elliott as it sells down its stake, leaving the group with a free float of at least 35 per cent.
The return will mark a radical turnaround for the group, which fell into administration after costs from its vast UK store portfolio together with an ambitious overseas expansion programme left the firm unable to pay its £21m rent bill.
Chief executive Martyn Gibbs said the group had been “transformed” into a stronger multi-channel business since its restructuring and has slimmed down costs by halving its store portfolio to 560 stores across the UK and Spain.
“The business is now well set to capitalise on the growing market for gaming content, whether digital or physical, new or pre-owned,” he said.
The retailer, which has been renamed Game Digital, reported £586.4m of revenues in the six months to 25 January compared with £427.3m the same time last year, while adjusted earnings doubled from £24.5m to £50.8m. Adjusted earnings in 2013 were £47m.
As part of the offering, Game said it will also issue “virtual loyalty shares” worth £2m to loyal customers who shop frequently with the retailer.
Some 20,000 customers will be able to trade in their shares at fixed times in the year for reward points, which can then be redeemed in stores. Game said the scheme will be largely funded by its main shareholder Elliott.
THREE NUMBERS FROM GAME’S INTENTION TO FLOAT
99 per cent
The stake owned by US hedge fund Elliott Advisors
The amount the firm plans to raise by selling new shares
Game Digital’s revenues in the six months to 25 January
BEHIND THE DEAL
CANACCORD GENUITY | BRUCE GARROW
1 Managing director Bruce Garrow is leading Canaccord’s team as financial adviser, sole sponsor and joint bookrunner on the IPO.
2 Garrow has worked on a number of Canaccord’s recent IPOs including Patisserie Valerie, Poundland, Polypipe and W&G Investments. He is also currently working on Fat Face’s IPO.
3 He joined Canaccord after the investment bank’s takeover of smaller rival Collins Stewart in 2012. A Newcastle University graduate, Garrow has also worked for Numis and Dawny Day.
Canaccord chief executive Alexis de Rosnay is also overseeing the team, with Garrow also joined on the corporate broking side by Cara Griffiths and Emma Gabriel. HSBC and Liberum are also acting as joint bookrunners on the IPO while Citigate Dewe Rogerson are Game’s PR advisers.