Game recommends Sports Direct takeover offer
Game has recommended shareholders approve a £51.9m takeover offer from Sports Direct.
The company said Mike Ashley’s offer of 30p per share represents a “fair value” for the group.
Read more: Mike Ashley’s Sports Direct lines up game takeover
Game said the takeover would help it drive forward its esports initiative Belong Gaming Arenas.
However, it said it was “disappointed” that Sports Direct published its offer document while discussions were ongoing between the two firms.
Sports Direct already owned a 20 per cent stake in the game shop before it launched its bid earlier this month by upping its holding to 30 per cent.
In a statement today Game said: “In coming to this recommendation, the board has considered the growing size of Sports Direct’s shareholding in the Group and the reliance Game has on Sports Direct for supporting its future growth prospects…combined with the ongoing industry headwinds, current negative retail market outlook and the likely elongated current console lifecycle which are expected to impact the future financial performance of the group .”
The acquisition is the latest in Ashley’s spending spree having already scooped up House of Fraser and Evans Cycles last year.
The retail tycoon saw his near 30 per cent stake in department store Debenhams wiped out earlier this year after it fell into the hands of its lenders in a pre-pack administration deal.
Read more: Sports Direct launches legal challenge to Debenhams restructuring plan
At the time of making the offer 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.”